Crude Edges Up After Demand Driven Fall Yesterday

Crude is ticking back up after falling over 3$/bbl yesterday as central bank tightening on the back of high inflation weighs on the oil market and data already shows weak oil product demand.

• Brent NOV 22 up 0.6% at 91.38$/bbl
• WTI OCT 22 up 0.5% at 85.49$/bbl
• Gasoil OCT 22 up 2.8% at 949.5$/mt
• WTI-Brent down -0.08$/bbl at -6.28$/bbl
• Downside pressure also came after a deal was reached averting a US rail strike and with ongoing uncertainty over the future oil demand from China as they continue with their Covid Zero policy. Reports that the US will not replenish SPR until after fiscal year 23 added to the move.
• China’s refining industry data overnight showed Aug throughout just 0.9% higher than July although some other broad indicators showed signs of recovery. China is considering extra oil product export quotas to help boost the economy.
  • Brent NOV 22-DEC 22 down -0.01$/bbl at 1.22$/bbl
  • Brent DEC 22-DEC 23 down -0.04$/bbl at 9.19$/bbl
• Upside supply risks from Russia, Kazakhstan, Libya and other underproducing OPEC members are maintaining curve backwardation. Crude time spreads held steady yesterday despite the fall in the flat price markets.
  • US 321 crack down -0.3$/bbl at 27.79$/bbl
  • US gasoline crack unchanged at 16.91$/bbl
  • US ULSD crack down -0.1$/bbl at 50.58$/bbl
• Diesel crack spreads fell even faster than crude after weak EIA demand data earlier in the week added to the wider bearish market sentiment. Diesel spreads fell nearly 5% to the lowest since early August but are relatively stable so far today.