Crude Bounces After 6% Fall This Week

Brent has rebounded off the lowest since mid Feb in early trading this morning. Yesterday crude continued the recent bearish trend with optimism for an Iranian nuclear deal adding to concerns for the Chinese recovery from covid restrictions and the wider global economic growth.

• Yesterday Iran’s response to EU over the proposed draft text was described as constructive but overnight a note from Goldmans Sachs said an Iran agreement in the short term was unlikely. They said a stalemate is mutually beneficial for both sides but if a deal was reached then Iran supply could gradually increase by 1mbpd from Q123 at the earliest.
• oBrent OCT 22 up 1% at 93.26$/bbl
• oWTI SEP 22 up 1.1% at 87.49$/bbl
• oGasoil SEP 22 up 1.7% at 1035.25$/mt
• oWTI-Brent down -0.11$/bbl at -6.16$/bbl
• The potential for more supply has added to a wider easing in crude supply, softening the forward curve backwardation. Spreads are steady this morning having gradually fallen since early June.
• oBrent OCT 22-NOV 22 down -0.03$/bbl at 0.57$/bbl
• oBrent DEC 22-DEC 23 up 0.15$/bbl at 6.19$/bbl
• Diesel crack spreads continue to strengthen while gasoline remains stable. API data last night showed draws in both crude and products adding to the already low inventory levels and potentially suggesting an easing of weaker demand.
• oUS 321 crack up 0.3$/bbl at 43.63$/bbl
• oUS gasoline crack up 0.1$/bbl at 35.54$/bbl
• oUS ULSD crack up 0.8$/bbl at 59.81$/bbl