Chinese demand uncertain & still no EU ban

Brent remains in the 102 – 115$/bbl range with EU still yet to agree a ban on Russian oil and covid lockdown restrictions limiting Chinese demand.

• Brent JUL 22 down -1.2% at 112.01$/bbl
• WTI JUL 22 down -1.3% at 108.87$/bbl
• Gasoil JUN 22 down -1.8% at 1052$/mt
• WTI-Brent down -0.26$/bbl at -3.11$/bbl
• EU continues to struggle to reach an agreement on oil sanctions against Russia. Hungary remains opposed to a deal and have stated they expect negotiations could continue into next month. Germany however also stated that they hope for an agreement “within days” with EU leaders meeting next week. The proposal was for a ban on Russian oil by the end of the year with a few very dependant members, such as Hungary, given until the end of 2024 to move away from Russian oil.
• Covid cases in Beijing are still on the up, increasing the risk of further restrictions as Shanghai looks to end lockdown after cases have fallen. China has released measures to support business and aid demand.
• With oil markets, especially refined products, still tight the curve remains in backwardation. US is considering using emergency diesel reserves if the supply crunch in the northwest deteriorates however these only amount to 1mbbls in storage. Front spreads have strengthened in recent days to the highest since March.
• Brent JUL 22-AUG 22 up 0.02$/bbl at 2.66$/bbl
• Brent DEC 22-DEC 23 down -0.47$/bbl at 11.9$/bbl