Crude and Spreads Drift Lower on Demand Uncertainty

Crude is drifting lower today but remains within the range of approximately 85.6$/bbl to 88.9$/bbl seen last week. Global oil demand growth and recession concerns continue to limit upside moves. The potential for a boost to demand from China reopening this year has supported prices along with Russian supply concerns.

• Brent MAR 23 down -0.7% at 86.03$/bbl
• WTI MAR 23 down -0.7% at 79.16$/bbl
• Gasoil FEB 23 down -0.9% at 929.25$/mt
• WTI-Brent up 0.07$/bbl at -6.88$/bbl
• The OPEC JMMC advisory committee meet on 1 Feb as they aim to help to maintain market stability. The group is currently expected to keep oil production levels unchanged.
• Recent signs that Chinese demand may be starting to recover include strong physical crude purchases, higher refinery rates and an increase in Sinopec gasoline sales by 20% due to the Lunar New Year.
  • Brent MAR 23-APR 23 down -0.09$/bbl at 0.17$/bbl
  • Brent JUN 23-DEC 23 down -0.11$/bbl at 3.29$/bbl
• The potential for further disruption to oil flows following the EU ban on Russian products from next weekend is supporting crude time spreads. The Brent spreads are today just below the highs from Friday when the prompt spreads reached the highest since 3 Jan and longer dated spreads the highest since mid November.
• Crack spreads are softer today although gasoline cracks are holding onto gains more than diesel with Russian supply concerns offset against weak near term demand.
  • US gasoline crack down -0.4$/bbl at 28.74$/bbl
  • US ULSD crack down -0.4$/bbl at 53.99$/bbl