Crude Eases Back from Yesterday's Gains with No Clear Direction

Brent crude is easing back to reverse yesterday’s gains driven by oil demand concerns from a global economic slowdown and with further central bank interest rate hikes expected. The market has no clear direction with a potential demand recovery in China providing the upside risk. Front month Brent has bounced between around 81.9$/bbl and 84.3$/bbl in the last couple of days.

• Brent APR 23 down -0.9% at 83.34$/bbl
• WTI APR 23 up 0.3% at 76.78$/bbl
• Gasoil MAR 23 down -0.5% at 795.25$/mt
• WTI-Brent down -0.21$/bbl at -6.56$/bbl
• Strong refinery runs rates in China and increasing oil imports are combining with ongoing supply uncertainty to maintain the forward curve backwardation. Russia plans to cut oil production by 500kbpd or about 5% of its output in March. Russian crude exports remain strong but higher volumes on the water show longer journey times and vessels leaving without a buyer. The front WTI time spread remains in contango suggesting ample near term supplies amid weak US demand.
  • Brent APR 23-MAY 23 down -0.01$/bbl at 0.28$/bbl
  • Brent JUN 23-DEC 23 down -0.06$/bbl at 2.42$/bbl
• Diesel crack spreads are steady after a month long decline with higher Russian output than expected and weak US demand weighing on product prices. Russian oil products flows are increasing in volume towards Asia and Chinese diesel exports remain high. The US gasoline crack has also seen some support back up over 25$/bbl after reaching a low of around 22$/bbl on Friday.
  • US gasoline crack down -0.2$/bbl at 25.27$/bbl
  • US ULSD crack up 0.1$/bbl at 38.24$/bbl