Brent Drifts Lower From Recent Range High

Brent trading lower today as the market continues to bounce between about 91$/bbl and 94.3$/bbl. Prices are volatile as near-term tight supplies are weighed against concern for oil demand from central back tightening, the impact of high prices and little sign of recovery in demand from China.

• Brent DEC 22 down -1% at 92.58$/bbl
• WTI DEC 22 down -0.8% at 84.68$/bbl
• Gasoil NOV 22 down -0.6% at 1065.5$/mt
• WTI-Brent up 0.09$/bbl at -7.89$/bbl
• The crude forward curve remains in strong backwardation despite a gradual pull back from highs seen at the start of the week. The main supply risks come from concern for Russian output with the upcoming EU ban on seaborne Russian crude and G7 oil price cap combined with the OPEC+ target output reduction for Nov and Dec.
• Saudi Arabia’s oil minister again defended the OPEC+ decision to cut production saying the cut was justified by a weak economic outlook. He also criticised the release of emergency inventories and highlighted the need to preserve spare capacity.
  • Brent DEC 22-JAN 23 down -0.06$/bbl at 1.72$/bbl
  • Brent JAN 23-FEB 23 down -0.09$/bbl at 1.55$/bbl
  • Brent DEC 22-DEC 23 down -0.34$/bbl at 11.44$/bbl
• API data last night showed a crude build, gasoline draw and small build in distillates, maintaining product stock levels well below normal. Gasoline crack spreads continue to rally since Oct 10 due to tight supplies with high refinery outages limiting supplies. Tight global supplies also support diesel crack spreads although economic slowdown concerns have limited recent upside moves.
  • US 321 crack down -0.2$/bbl at 35.9$/bbl
  • US gasoline crack down -0.5$/bbl at 21.59$/bbl
  • US ULSD crack down -0.5$/bbl at 64.17$/bbl