Crude Drifts Lower with Demand Concern in Focus

Brent crude is drifting down towards the low point from last week around 81.9$/bbl with the market focus on global oil demand concerns. The US Fed minutes due out later today may give an indication of further central bank tightening in the US.

• Brent APR 23 down -0.4% at 82.72$/bbl
• WTI APR 23 down -0.5% at 75.98$/bbl
• Gasoil MAR 23 up 1.2% at 810$/mt
• WTI-Brent down -0.09$/bbl at -6.76$/bbl
• Crude remains in the middle of a range of approximately 10$/bbl this year with the economic slowdown offset by optimism for a recovery in demand in China. Extra uncertainty comes from the supply side with Russia due to cut production by 500kbpd in March and with a potential halt to CPC crude supplies due to storms in the region.
  • Brent APR 23-MAY 23 unchanged at 0.28$/bbl
  • Brent JUN 23-DEC 23 down -0.04$/bbl at 2.38$/bbl
• The concern for the US economy and the small SPR release expected this year is driving WTI lower compared to Brent with the spread falling to the widest this month at -6.76$/bbl. The prompt WTI spread is still in contango due to weak US demand but the rest of the curve is in backwardation with a potential demand recovery in the second half of this year.
• Refined product crack spreads are holding relatively steady after trending lower since mid January. Tight supplies due to high refinery outages during seasonal maintenance in the US are providing some support despite the current weak demand.
  • US gasoline crack up -0.2$/bbl at 34.01$/bbl
  • US ULSD crack down -0.2$/bbl at 40.10$/bbl