Crude Drifts Lowers on Oil Demand Concerns

Crude oil is drifting lower today with economic driven oil demand concerns in focus after volatile trading following the US CPI data yesterday showing continuing inflationary pressures. Brent crude dipped as low as 84.17$/bbl after the data release before recovering up to nearly 86$/bbl.

• Brent APR 23 down -1.2% at 84.57$/bbl
• WTI MAR 23 down -1.3% at 78.01$/bbl
• Gasoil MAR 23 down 0% at 850$/mt
• WTI-Brent down -0.08$/bbl at -6.34$/bbl
• A build in US oil inventories from the API data last night including a big build in crude are adding to the downside and limiting any impact from upside pressures. Optimism over future Chinese demand and the lower oil output from Russia are supportive of both the crude futures and the time spreads.
• The shape of the Brent forward curve is relatively unchanged over the last week with spreads just edging slightly lower. Weak near term demand has been weighing on markets with the prompt WTI spreads still trading in contango but could be boosted by the potential for a US and European economic recovery later this year.
  • Brent APR 23-MAY 23 down -0.03$/bbl at 0.25$/bbl
  • Brent JUN 23-DEC 23 down -0.2$/bbl at 2.63$/bbl
• OPEC has raised its 2023 global oil demand growth forecast by 100kb/d to 101.87mb/d this year with a resurgence in Chinese demand cited as the key driver. The IEA monthly report is due out today.
• Diesel and gasoline crack spreads have seen some support over the last week with tighter supplies balanced against weak demand and slightly higher inventory levels. Gasoline and diesel exports from the US Gulf Coast have fallen to the lowest in two years with limited fuel supplies due to the heavy maintenance season.
  • US gasoline crack down -0.2$/bbl at 25.28$/bbl
  • US ULSD crack up 0.3$/bbl at 43.98$/bbl