Red Sea Attacks: On Saturday, U.S. President Donald Trump ordered the U.S. military to begin military action against the Houthis. He noted that rebel attacks on U.S. ships must stop from today. In his message, Trump also called on Iran to immediately stop supporting the Houthis. The operation includes a series of precision strikes on Houthi targets "across Yemen to defend American interests, deter enemies, and restore freedom of navigation," the statement said. The Houthi continue to attack ships in the Red Sea which is one of the short cuts on the waterways for ships to take for different commodities. 

China Has Positive News: China's crude oil throughput in January and February rose 2.1% versus a year earlier, supported by a new refinery and holiday travel, but weak refining margins persisted. If the same data is looked at year on year at this tame time it is showing a true growth of 0.3%. This is getting overshadowed by their newly launched Shandong Yulong Petrochemical refinery, which since last November has operated its first 200,000-bpd crude processing unit at around 90% of capacity. The refinery is expected to launch its second 200,000-bpd crude facility this month.

SAF Fuel: Sustainable aviation fuel also known as "SAF" continues to grow more in Asia and for the first time supply will outpace regional demand. At least five SAF projects in Asia, outside of China, have started up or are earmarked to start production this year, targeting exports regionally and to Europe. Unlike in Europe, where flights departing EU and UK airports must now use 2% SAF in their tanks, Asia's mandated demand remains low with compulsory use of the renewable fuel in some nations to start only later this decade. Planned SAF production could take a hit if regional demand remains tepid and prices fall below production costs, industry sources say, though Asia's increased capacity is good news for airlines that have been complaining SAF is too expensive and hard to source.

Market Overview: Energy products are starting the day up with the main support coming from the United States vowing to keep attacking Yemen's Houthis until the Iran-aligned group ends its assaults on shipping. More positive news came from the Chinese economy showing signs of recovery. Retail sales growth had a good uptick along with refineries throughput. Oil rose slightly last week, though Brent is still down almost 5% this year on concern over a global economic slowdown driven by escalating trade tensions between the U.S. and other nations. OPEC+ oil producers' plan to raise oil output from April has also pressured prices. However, the prospect of tighter U.S. sanctions against Iran more than offsets the gradual OPEC+ production increase.

SAF Continued. 

SAF Continued from the paragraph above: Anticipated production capacity does not mean that much SAF will actually be produced given an industry focus on profitability and actual demand. The price gap between SAF and conventional jet fuel narrowed from nearly three times last year to 2.4 times this year on a free on board (FOB) Singapore basis, Argus data showed. This does show that SAF is getting cheaper to make, but it is going to be the leading headwind for growth. Some countries mandate use of SAF for a certain percentage. Others have voluntary used SAF to boost their green credentials among customers and as part of industry sustainability commitments.

Oil prices saw a slight increase on Monday due to escalating tensions in Yemen, where the U.S. vowed to continue its attacks on Houthi rebels supported by Iran, and positive Chinese economic data indicating stronger demand. Brent crude futures rose by 0.7%, while U.S. West Texas Intermediate gained 0.6%. The increase in oil prices was also supported by a rise in China’s crude oil throughput and retail sales growth, though unemployment and weaker factory output remained concerns. Additionally, a weaker U.S. dollar boosted oil demand by making it cheaper for overseas buyers. However, concerns about the global economic slowdown and a potential increase in Russian crude supply due to ongoing peace talks between the U.S. and Russia limited further gains.