- Oil remains relatively unchanged amid halted flows from Iraqi Kurdistan and easing banking fears
- May ’23 WTI gained 16c this morning to trade around $72.97/Bbl
- Oil prices rallied by $3.55/Bbl on Monday, marking the largest single-day rise since October 2022
- Prices found support as semi-autonomous Kurdistan stopped exporting 0.45 MMBbl/d via Turkey due to an arbitration decision requiring Iraq's approval for oil shipments
- Kurdish officials head to Baghdad today to discuss resuming oil exports through Turkey (BBG)
- Additionally, Monday's announcement that First Citizens Bank will purchase deposits and loans from failed Silicon Valley Bank boosted optimism about the banking sector
- Equities are trading flat as the market focuses on the banking crisis and the upcoming February CPI report on Friday
- Russian crude exports fell by less than Kremlin's pledged 0.5 MMBbl/d output cutback in March (BBG)
- Russian shipments fell by 0.123 MMBbl/d for the week ending on March 24, significantly less than the 0.5 MMBbl/d cut Moscow had pledged
- No Russian crude was exported to Northern Europe, with demand in China and India still accounting for the majority of exports of Russian crude in 2023
- Additionally, Russia’s Deputy Prime Minister Alexander Novak admitted yesterday that Russia will need to find new insurance and re-insurance mechanisms for its oil exports as the West won't insure cargo above the EU and US price cap
- Oil consumers rush to increase hedging levels as prices drop, boosting open interest in crude contracts (Bloomberg)
- Oil consumers, including airlines, increased their hedging levels when prices plunged earlier this month to guard against a possible rebound in oil prices later this year
- Swap dealers posted their second-largest increase in long positions in ICE Brent futures and options last week, indicating a significant uptick in consumer hedging activity
- Many research shops including Goldman Sachs forecast a rebound in oil prices later this year, which would increase costs for oil users, leading to a rise in hedging activity
- Higher hedging volumes have also boosted open interest across the oil market, hitting the highest in a little over a year late last week