Crude Drifting on Economic Growth Concerns

Crude is drifting lower after a volatile day yesterday saw crude initially reacting to moves in the US dollar and falling after the US CPI beat expectations pushing USD higher. Economic growth concerns and central bank tightening continue to weigh on the oil prices despite ongoing upside supply risks.

• Late in the day yesterday crude rallied on reports that the US may begin refilling the US Strategic Petroleum Reserve (SPR) when crude oil prices fall below USD$80 a barrel.
  • Brent NOV 22 down -0.2% at 92.94$/bbl
  • WTI OCT 22 down -0.2% at 87.15$/bbl
  • Gasoil OCT 22 down -4.5% at 1009.5$/mt
  • WTI-Brent up 0.06$/bbl at -6.25$/bbl
• OPEC yesterday left demand forecasts unchanged, increasing by 3.1mbpd in 2022 and by 2.7mbpd in 2023. Demand will be supported by economic growth in major consuming countries combined with reduced covid restrictions and geopolitical uncertainties.
  • US 321 crack down -2.1$/bbl at 29.76$/bbl
  • US gasoline crack down -0.9$/bbl at 16$/bbl
  • US ULSD crack down -4.2$/bbl at 57.07$/bbl
• Diesel cracks spreads are falling after the API data last night showed a build in distillates with a big build in crude stocks and a draw in gasoline. Gasoline cracks are following with the possibility that demand will continue to disappoint in EIA data released later today.
  • Brent NOV 22-DEC 22 down -0.03$/bbl at 0.92$/bbl
  • Brent DEC 22-DEC 23 down -0.04$/bbl at 9.05$/bbl
• Crude time spreads are holding steady after pulling back yesterday following the initial moves in crude. Prompt spreads are near the monthly lows but longer dated spreads are more robust driven by Russian supply risks into next year.