Crude Edging Higher After Falling on Economic Concerns

Crude is edging higher today with Brent trading between 80.4$/bbl and 83.05$/bbl so far this week after falling last week on concerns for the US and global economy amid uncertainty over the pace of recovery in China. The market is cautious about potential further central bank rate hikes in the US and EU next week as they try to curb inflation.

• Brent JUN 23 up 0.8% at 81.38$/bbl
• WTI JUN 23 up 0.9% at 77.76$/bbl
• Gasoil MAY 23 up 0.7% at 721.25$/mt
• WTI-Brent unchanged at -3.61$/bbl
• Tighter supplies are providing support with the OPEC production cut starting in May, the ongoing halt to Iraqi Kurdistan oil flows from Turkey, force majeure to loadings in Nigeria and falling Cushing inventories.
• Russian oil exports remain buoyant despite the target 500kbpd production cut in place since March.
• Crude backwardation also saw some support after reaching the lowest since the start of the month earlier this week. The longer spreads are still above the levels seen before the OPEC cut announcement, but prompt spreads are trading back at the low levels seen last month.
  • Brent JUN 23-JUL 23 down -0.02$/bbl at 0.15$/bbl
  • Brent DEC 23-DEC 24 up 0.07$/bbl at 4.08$/bbl
• The WTI-Brent spread is narrowing in to -3.6$/bbl from -4.5$/bbl earlier this month with support from the falling Cushing stocks in recent weeks and with the addition of WTI Midland into the physical Dated Brent benchmark from June.
• Diesel cracks spreads fell again yesterday to continue the bearish trend with weak demand and ample supplies from returning and new refinery output weighing on the margins. Asian refiners are considering reducing future run rates due to the low margins including refiners in South Korea and Thailand.
  • US gasoline crack up 0.3$/bbl at 30.83$/bbl
  • US ULSD crack up 0.1$/bbl at 25.76$/bbl