Oil futures: Crude pares earlier losses, rebounds from 3-week lows
Quantum Commodity Intelligence – Crude oil futures Monday were slightly lower as benchmarks initially extended the pre-weekend selloff amid easing tensions between Iran and Israel, before stabilising later in the session.
Front-month Jun24 ICE Brent futures were trading at $87.06/b (1830 GMT), compared to the day's range of $85.79-$87.15/b and Friday's settle of $87.29/b.
At the same time Jun24 NYMEX WTI was trading at $82.05/b versus Friday's settle of $82.22/b, while May24 was trading at $82.85/b heading into the expiry.
Prices rowed back at the end of last week after Israel's strike on Iran was played down by both sides, with crude values now back at levels prior to Israel's early-April strike on Iran's consulate in Syria, which had been viewed as a potential trigger to drag Iran further into the broader conflict.
But prices for heavier barrels were finding some support with OPEC+ seemingly in no hurry to start unwinding production cuts, while Mexico has reduced exports in favor of its own refining industry.
The return of Venezuelan sanctions could also hit exports, although flows to its primary customers in China are expected to continue.
Iran's oil sector is also set to be targeted with tighter sanctions, but again, this was seen as unlikely to deter Chinese buyers unless backed up by tighter enforcement.
Meanwhile, wildfires in Canada's Alberta province have put producers operating in Canada's oil sands on alert.
But a weak spot for the oil complex has been distillates, as global diesel markets slipped into contango for the first time in around a year, while cracks plummeted to fresh 10-month lows for Europe and Asia.
"The fuel used to power heavy industry such as agriculture and mining, as well as cars and trucks, is witnessing slowing demand with futures timespreads in Europe, Asia and the US all slumping into a contango structure which normally is associated with an oversupplied market," said Ole S Hansen, Head of Commodity Strategy at Saxo Group.
