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Brent Pushing Up to Recent Range High

OIL

Crude resumes the push higher after the big draw in US crude inventory yesterday and with the possibility of a slower pace of Fed rate hikes.

  • The draw in crude stocks was driven by record crude exports as a widening WTI-Brent spread encourages supply to Europe. A reduction in Russia supply to Europe has combined with concerns for the US economy to move the spread from -3.5$/bbl at the start of June to over -9$/bbl.
  • The Fed raised interest rates as expected by 75bp on the back of high inflation but signalled that the pace of hikes would slow at some point.
    • Brent SEP 22 up 1% at 107.65$/bbl
    • WTI SEP 22 up 1.2% at 98.46$/bbl
    • Gasoil AUG 22 up 0.4% at 1106.25$/mt
    • WTI-Brent up 0.07$/bbl at -9.19$/bbl
  • Tight supply and low stock levels are maintaining the forward curve backwardation although front spreads are drifting lower with Brent 1-2 off from the record highs seen earlier this week.
    • Brent SEP 22-OCT 22 down -0.19$/bbl at 4.76$/bbl
    • Brent DEC 22-DEC 23 up 0.42$/bbl at 9.68$/bbl
  • The product cracks saw high volatility after the US stocks data showed a fall in both gasoline and distillate stocks keeping inventories below normal. Implied demand for both picked up slightly, recovering from the recent fall but remains below normal levels for the time of year.
    • US gasoline crack down -0.3$/bbl at 35$/bbl
    • US ULSD crack down -0.1$/bbl at 54.72$/bbl
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Crude resumes the push higher after the big draw in US crude inventory yesterday and with the possibility of a slower pace of Fed rate hikes.

  • The draw in crude stocks was driven by record crude exports as a widening WTI-Brent spread encourages supply to Europe. A reduction in Russia supply to Europe has combined with concerns for the US economy to move the spread from -3.5$/bbl at the start of June to over -9$/bbl.
  • The Fed raised interest rates as expected by 75bp on the back of high inflation but signalled that the pace of hikes would slow at some point.
    • Brent SEP 22 up 1% at 107.65$/bbl
    • WTI SEP 22 up 1.2% at 98.46$/bbl
    • Gasoil AUG 22 up 0.4% at 1106.25$/mt
    • WTI-Brent up 0.07$/bbl at -9.19$/bbl
  • Tight supply and low stock levels are maintaining the forward curve backwardation although front spreads are drifting lower with Brent 1-2 off from the record highs seen earlier this week.
    • Brent SEP 22-OCT 22 down -0.19$/bbl at 4.76$/bbl
    • Brent DEC 22-DEC 23 up 0.42$/bbl at 9.68$/bbl
  • The product cracks saw high volatility after the US stocks data showed a fall in both gasoline and distillate stocks keeping inventories below normal. Implied demand for both picked up slightly, recovering from the recent fall but remains below normal levels for the time of year.
    • US gasoline crack down -0.3$/bbl at 35$/bbl
    • US ULSD crack down -0.1$/bbl at 54.72$/bbl