Crude Edges Lower as Demand Concern Offsets Supply Disruption

Global oil demand concerns continue to weigh on crude prices as Brent drifts lower following volatile trading on Friday. Crude originally fell on Friday after higher than expected inflation data and assisted by a strengthening US dollar before correcting with supply uncertainty and China demand optimism giving upside support.

• Brent APR 23 down -0.7% at 82.61$/bbl
• WTI APR 23 down -0.6% at 75.89$/bbl
• Gasoil MAR 23 up 0.6% at 812.75$/mt
• WTI-Brent up 0.01$/bbl at -6.72$/bbl
• Supply disruption is a key driver of upside moves and forward curve backwardation with Russia expected to cut oil output in March and Poland’s PKN Orlen has stopped receiving Druzhba pipeline oil flows according to CEO on Saturday.
• After dipping lower early last week the crude time spreads regained ground as the prompt Brent spread rallied from around 0.1$/bbl up to 0.33$/bbl. The longer dated spreads are hovering in the middle of the range from this year.
  • Brent APR 23-MAY 23 unchanged at 0.34$/bbl
  • Brent JUN 23-DEC 23 down -0.04$/bbl at 2.43$/bbl
• Diesel crack spreads are holding steady over the last week after falling since mid Jan due to weak demand, rising stocks levels, steady supplies and mild weather. The declining trend has been halted by uncertainty over the product trade flows following the EU sanctions on Russian products implemented on 5 Feb and with the strong US refinery maintenance season.
  • US gasoline crack up 0.1$/bbl at 32.22$/bbl
  • US ULSD crack up 0.6$/bbl at 40.35$/bbl