Crude Edges Higher to Extend Small Weekly Gain

Crude front month is edging higher with China demand optimism and signs of increased physical crude purchases as well as potential Russian supply disruption. Upside moves are muted by weak near term demand and economic recession fears.

• Brent MAR 23 up 0.5% at 86.57$/bbl
• WTI MAR 23 up 0.5% at 81.02$/bbl
• Gasoil FEB 23 up 2.1% at 963$/mt
• WTI-Brent down -0.08$/bbl at -5.54$/bbl
• The impact of the EU crude ban and G7 price cap on Russian output is not currently clear but flows could be further disrupted following the oil product ban from 5 Feb. The crude price cap level is due for review this month while the upcoming cap on product prices is still yet to be agreed. US is pushing for the Russian oil cap to remain at 60$/bbl resisting pressure from some European countries to lower the price.
  • Brent MAR 23-APR 23 unchanged at -0.15$/bbl
  • Brent JUN 23-DEC 23 up 0.04$/bbl at 2.96$/bbl
• The prompt time spread is holding steady in contango weighed down by weak near term demand. Recent EIA and GasBuddy data have showed a small increase in product demand, but levels remain well below normal. The backwardation of the remainder of the curve is strong with the potential for a global demand recovery later this year.
  • US gasoline crack up 2.2$/bbl at 28.74$/bbl
  • US ULSD crack down -0.8$/bbl at 60.75$/bbl
• Gasoline and diesel cracks spreads are holding gains since early this year with concern for tight supplies after the EU ban on Russian products. The expected missing supplies of diesel as well as naphtha and VGO for gasoline production is supporting product prices while Europe continues to boost inventories ahead of the ban.