Crude oil is trading steady – ING

Crude oil prices steadied yesterday after a sharp fall over the past few sessions as the US prepares to impose tariffs on imports from Canada, Mexico and China from Saturday, ING’s commodity analysts Ewa Manthey and Warren Patterson note.

Demand for Middle East crude remains strong

“NYMEX WTI currently trades at US$73.6/bbl while ICE Brent trades at US$77.3/bbl. WTI’s discount to Brent has narrowed to an average of US$3.6/bbl this year so far compared to an average of US$4.4/bbl for the full year 2024 as higher tariffs could make the oil supplies relatively tight in the US market.”

“The weekly inventory report from the American Petroleum Institute was a mixed bag. The API reported that the US crude oil inventory increased by 2.86m barrels over the last week although crude oil stocks at Cushing, Oklahoma fell by 144k barrels. For products, gasoline inventory was reported to have increased by 1.89m barrels while distillate inventory dropped by 3.75m barrels.”

“Despite the recent weakness in the oil market, demand for Middle East crude appears to remain strong with the market expecting Saudi Arabia to raise official selling price by around US$2/bbl for Asian buyers for March deliveries. Saudi Arabia has raised the OSP by around US$0.6/bbl for Feb deliveries for Asian buyers.”