- Oil is trading slightly higher, around $82.80, extending gains from yesterday
- WTI and Brent December-December spreads are the highest in several months, with prompt spreads also climbing
- Open interest in Brent is the highest since October 2021
- Implied volatility in the options market has fallen, with Brent’s put skew now being the least bearish since November
- India buys more US oil as sanctions hit Russian flows (BBG)
- Indian refiners are on track to import the most US crude in nearly a year after increased enforcement of Russian sanctions has forced buyers to look elsewhere for supply
- Major refiners in India have purchased about 7 MMBbls of US crude for April loading so far this month
- However, Russia remains the largest crude supplier to India and has been since the start of sanctions on Russia
- JPM says drone attacks have taken 900 MBbl//d of Russian capacity offline (BBG)
- In 2024, there have been 23 drone attacks on Russian refineries, terminals, and depots
- The refining capacity is expected to remain offline for “several weeks, if not months”
- The Ukrainian drone attacks have added about $4 of risk premium to crude prices
- The lower refinery utilization may lead to higher crude exports from Russia
- Chinese mega-refinery buys crude in advance of startup (BBG)
- Chinese refiner Shandong Yulong has purchased crude in preparation for the startup of its new 400 MBbl/d refinery
- The company purchased Oman and Russian ESPO crudes for April and May delivery
- The refinery is preparing to begin testing units by the end of the second quarter
