Crude Edges Higher Ahead of US Inflation Data

Crude edging up to recover some of the losses seen yesterday as Brent crude has fallen 6$/bbl from around 78.4$/bbl on the 5 June following the OPEC meeting. Weaker than expected growth in China and economic concerns in the US have driven crude lower ahead of key US inflation data and the US Fed monetary policy meeting this week where interest rates are expected to be held unchanged.

• Brent AUG 23 up 1% at 72.55$/bbl
• WTI JUL 23 up 0.8% at 67.64$/bbl
• Gasoil JUL 23 unchanged at 677$/mt
• WTI-Brent down -0.11$/bbl at -4.73$/bbl
• Strong supplies from Russia are adding to the downside pressure although the falling prices may prompt Saudi Arbia to extend the 1mbpd voluntary production cut beyond July after the existing OPEC voluntary production cuts have largely been dismissed.
• Crude curve backwardation has narrowed in line with the bearish move in the front month with Dec23-Dec24 not far above the lowest of the year so far. The prompt Brent spread has fallen back to just above parity while the prompt WTI spread is in contango. The concern for a US recession is driving WTI quicker than Brent taking the front month spread down below -4.7$/bbl.
  • Brent AUG 23-SEP 23 unchanged at 0.02$/bbl
  • Brent DEC 23-DEC 24 up 0.07$/bbl at 2.55$/bbl
• US gasoline crack spreads dipped slightly yesterday but are stronger this month with support from low inventories and an outage at the Phillips 66 Bayway refinery FCC until at least 4 July. Demand concerns continue to limit upside moves in in both diesel and gasoline but an outage at Shell’s Pernis refinery, strong demand from India and a dip in Russian diesel exports are providing some support to diesel.
  • US gasoline crack up 0$/bbl at 37.59$/bbl
  • US ULSD crack up 0.2$/bbl at 30.15$/bbl