Crack Spreads Gain After EIA Draws and Higher Implied Demand

Crude is holding onto earlier losses with market focus still on weak demand after the updated EIA inventory data showing a crude build and oil product draws. Gasoline and diesel crack spreads are edging higher driven by the lower inventories and a slight recovery in implied demand.

• Crude stocks showed a build counter to expectations of a small draw but in line with API data yesterday. The build was driven by a smaller than expected increase in refinery utilisation and big fall in exports while production remained unchanged. Refinery utilisation increased mostly from an increase on the West Coast and the Rocky Mountains.
• Cushing stocks unexpectedly increase again to bring inventories to the highest since March.
• Distillate stocks showed a big draw with production still low and an increase in exports likely driven by higher flows to Europe.
• Gasoline stocks also showed a larger than expected draw with healthy exports and despite an increase in production.
• A small recovery higher in the four week implied demand for both gasoline and distillates added to the stock draws.
  • Brent JUL 23 down -1.8% at 76.03$/bbl
  • WTI JUN 23 down -2% at 72.22$/bbl
  • WTI-Brent down -0.05$/bbl at -3.86$/bbl
  • WTI JUN 23-JUL 23 down -0.06$/bbl at 0.03$/bbl
  • WTI DEC 23-DEC 24 down -0.37$/bbl at 3.2$/bbl
  • US gasoline crack up 0.9$/bbl at 31.61$/bbl
  • US ULSD crack up 0.6$/bbl at 27.61$/bbl