Crude Drifts Lower As Economy Remains in Focus

Brent crude is drifting lower to extend the trend from yesterday as economic growth concerns continue to offset OPEC+ cuts. Recessionary concerns are weighing on the market with the US Fed, the ECB and BOE all expected to raise rates at their upcoming meetings.

• Brent JUL 23 down -0.1% at 79.21$/bbl
• WTI JUN 23 down -0.1% at 75.55$/bbl
• Gasoil MAY 23 up 0.2% at 692.5$/mt
• WTI-Brent down -0.02$/bbl at -3.8$/bbl
• US ISM manufacturing data yesterday underscored a likely 25bp rate hike from the FOMC on Wednesday.
• Front month Brent has lost all the gains seen following the OPEC production cuts with concern for the economy, weaker Chinese manufacturing data adding uncertainty to the speed of recovery in China and stronger than expected Russian exports.
• Prompt time spreads held up yesterday but the longer dated spreads following the decline in flat price futures with the Dec23-Dec24 spread trading towards the lower end of the recent range.
  • Brent JUL 23-AUG 23 unchanged at 0.37$/bbl
  • Brent DEC 23-DEC 24 down -0.05$/bbl at 3.57$/bbl
• Diesel margins remain in a bearish trend with spreads just up from the lowest since early 2022. Spreads continue to be pressured by concerns for weak demand, refineries returning from outages and new refining capacity in the Middle East and China. Gasoline is seeing some more support than diesel ahead of the expected demand boost from the summer driving season.
• US gasoline demand rose 1.7% last week while diesel demand rose 5.0% according to GasBuddy data.
  • US gasoline crack down -0.1$/bbl at 31.45$/bbl
  • US ULSD crack up 0.1$/bbl at 24.38$/bbl