Crude Drifts Lower On Global Demand Concern Despite China Stimulus

Crude is drifting lower after seeing a rally yesterday to around 77.2$/bbl on optimism for oil demand in China following the introduction of economic stimulus measures. Data released in recent weeks has suggested weaker than expected economic growth in the country.

• Brent AUG 23 down -0.4% at 76.85$/bbl
• WTI AUG 23 down -0.3% at 72.29$/bbl
• Gasoil JUL 23 up 0.5% at 740.25$/mt
• WTI-Brent unchanged at -4.56$/bbl
• Concern for the US economy is adding bearish pressure following remarks from Fed Chair Jerome Powell yesterday pointing to continued inflationary pressure in the US and a high chance of additional interest rate hikes.
• On the supply side, OPEC production cuts and the voluntary additional cuts from Saudi Arabia starting next month are providing support but output from the sanctioned countries of Iran and Russia is strong.
  • Brent AUG 23-SEP 23 up 0.01$/bbl at -0.01$/bbl
  • Brent DEC 23-DEC 24 down -0.03$/bbl at 3.23$/bbl
• The Brent and WTI Aug-Sep time spreads are holding near parity with weak near term demand weighing on prices. The remainder of the curve is holding steady in fairly narrow backwardation with Dec23-Dec24 following the moves in the front month futures.
• Gasoline crack spreads are easing lower and diesel spreads steady ahead of the updated EIA inventory data today after API data yesterday showed a build in gasoline stocks but small decline in distillates.
  • US gasoline crack down -0.5$/bbl at 33.29$/bbl
  • US ULSD crack up 0.1$/bbl at 32.18$/bbl