Crude Bounces 1$ after 9% Fall on Recession Fears

Oil prices slid sharply yesterday as concerns for a recession drove markets lower. WTI fell 8% down below 100$/bbl and Brent 9% before bouncing back around 1$/bbl slightly this morning.

• Brent SEP 22 up 1.2% at 104.02$/bbl
• WTI AUG 22 up 0.7% at 100.23$/bbl
• Gasoil JUL 22 down -2% at 1130.75$/mt
• WTI-Brent down -0.59$/bbl at -6.8$/bbl
• Increasing risk of a recession on the back of high inflation have driven the sell off with crude prices reacting to the stronger dollar.
• Crude has recovered a little ground this morning with supply issues still present and with signs of increasing oil demand from China. Reports suggests that Chinese demand for gasoline and diesel are back to nearly 90% of June2019 levels as they recover from a period of covid restrictions. Outbreaks of new covid cases however continue to occur so the speed of full demand recovery is uncertain.
• Refined product crack spreads also reacted to the market selloff and fell further, continuing a trend from the middle of June.
• Supply disruption from Libya and Norway are helping to keep the short term physical market tight with prompt time spreads still at very high levels.
• Brent SEP 22-OCT 22 up 0.31$/bbl at 4.09$/bbl
• Brent DEC 22-DEC 23 up 0.11$/bbl at 10.7$/bbl
• US gasoline crack down -1.6$/bbl at 39.69$/bbl
• US ULSD crack down -0.6$/bbl at 49.74$/bbl
• Gasoline-Brent down -1.2$/bbl at 30.45$/bbl
• Gasoil-Brent down -2$/bbl at 36.5$/bbl