Crude Eases Back with Demand in Focus Ahead of Fed Decision

Crude drifts down from a Brent high of 83.87$/bbl yesterday ahead of the a widely expected 25bp rate hike at the FOMC meeting with focus likely on any indication of future policy. The market still has concern for economic growth and demand in US and China although OPEC supply reductions and potential China stimulus measures have driven a strong rally this month.

• Brent SEP 23 down -0.4% at 83.31$/bbl
• WTI SEP 23 down -0.5% at 79.27$/bbl
• Gasoil AUG 23 up 0.5% at 810.5$/mt
• WTI-Brent down -0.08$/bbl at -4.04$/bbl
• Russia’s seaborne crude flows from Baltic and Black Sea ports slumped to the lowest in seven months according to Bloomberg vessel tracking as cuts finally filter through.
• Turkish and Iraqi officials will discuss re-opening the closed Ceyhan pipeline when Turkish President Recep Tayyip Erdogan visits Baghdad – though a date has not been specified.
  • Brent SEP 23-OCT 23 up 0.02$/bbl at 0.41$/bbl
  • Brent DEC 23-DEC 24 down -0.08$/bbl at 4.47$/bbl
• Tightening supplies are support a stronger curve backwardation with the Brent prompt spread is catching up with recent gains seen in the WTI prompt spread. The Dec23-Dec24 spreads are moving in line with the flat price and just slightly softer today after reaching the highest since April seen yesterday.
  • US gasoline crack down -0.9$/bbl at 37.21$/bbl
  • US ULSD crack down -0.3$/bbl at 36.61$/bbl
• Gasoline and diesel cracks spreads have eased back from a recent driven by refinery supply issues, limited supply of gasoline blending components and low inventories. The updated US inventory data is due later today after the API data last night showed a gasoline draw but distillates build.