Crude Rallies as Iranian Protests Escalate

Core Insights - Crude oil and gasoline prices have reached one-month highs, driven by rising tensions in Iran and positive economic indicators in the US [2][3][4] Group 1: Market Dynamics - February WTI crude oil is up by $1.79 (+3.10%), while February RBOB gasoline has increased by $0.0352 (+2.00%) [1] - The unrest in Iran, which produces over 3 million barrels per day (bpd), poses a risk to crude production, potentially leading to price increases if protests escalate [3] - The US economic outlook is improving, with the December unemployment rate falling to 4.4% and the January consumer sentiment index rising to 54.0, both better than expected [4] Group 2: Supply and Demand Factors - The crude crack spread has risen to a three-week high, encouraging refiners to increase crude purchases for gasoline and distillate production [5] - Upcoming annual rebalancing of commodity indexes is expected to result in $2.2 billion inflows into oil futures contracts, which is a bullish factor for crude prices [6] Group 3: Price Forecasts - Morgan Stanley has revised its crude price forecasts downward, predicting a global oil market surplus that may peak mid-year, with Q1 forecast cut to $57.50 per barrel and Q2 forecast to $55 per barrel [7]