Crude Drifts Lower After Rising on China and Russia Uncertainty

MNI (London) - Crude edges lower with optimism for Chinese oil demand and concern for Russian supply offset against weaker economic driven oil demand growth.

• Brent FEB 23 down -0.6% at 83.83$/bbl
• WTI FEB 23 down -0.4% at 79.21$/bbl
• Gasoil JAN 23 down -1.6% at 954.25$/mt
• WTI-Brent up 0.21$/bbl at -4.62$/bbl
• Yesterday Russian confirm its response to the oil price cap by banning crude and refined product exports to buyers that implement the price cap. The measure will be in place from 1 Feb to at least Jul 2023 but avoids more extreme measures such as a minimum oil sale price.
• Optimism for Chinese oil demand is boosted by a recent downgrade of the management of covid from the top level to the second level and the removal of quarantine restrictions for inbound travellers from 8 Jan.
  • Brent FEB 23-MAR 23 down -0.29$/bbl at -0.64$/bbl
  • Brent JUN 23-DEC 23 down -0.09$/bbl at 2.6$/bbl
• Russia and China uncertainty are supporting curve backwardation except for the front month which remains in contango due to current weak demand.
• Diesel and gasoline crack spreads have rallied over the last week due to recent refinery outages. US Gulf Coast refineries are starting to ramp up production again after halting last week due to severe weather.
  • US gasoline crack up 0.1$/bbl at 20.01$/bbl
  • US ULSD crack down -1.3$/bbl at 59.34$/bbl