Crude Edging Higher as Tight Supplies Offset Economic Slowdown

Crude is ticking higher after bouncing within the same 2$/bbl range from yesterday as concern for tight supplies is balanced against an economic slowdown. The strength of the US dollar and uncertainty over the recovery in Chinese demand are also weighing on the market.

• Brent DEC 22 up 0.9% at 92.48$/bbl
• WTI NOV 22 up 1% at 86.34$/bbl
• Gasoil NOV 22 up 0.7% at 1119.5$/mt
• WTI-Brent up 0.01$/bbl at -7.12$/bbl
• US is planning to release another 10 to 15mbbls from the strategic reserves as potentially the final part for the planned 180mbbls withdrawal. A total of 165mbbls have already been sold from the reserves since March bringing SPR levels down to the lowest since 1984.
• Crude time spreads are slowly edging down from a peak earlier this month after the OPEC+ production cut announcement. Uncertainty over Russian supplies due to the upcoming sanctions, OPEC member underproduction, and recently downgraded US production estimates continue to support the curve backwardation. EIA yesterday estimated shale oil output to rise to 9.11mbpd in Nov.
  • Brent DEC 22-JAN 23 down -0.06$/bbl at 1.38$/bbl
  • Brent DEC 22-DEC 23 up 0.1$/bbl at 11.46$/bbl
• Diesel cracks are steady today, and the Gasoil time spreads are still holding strong due to tight global supplies. Ongoing strikes in France combined with low inventories, refinery maintenance and potential for lower output from Russia are supporting product markets.
  • US 321 crack down 0$/bbl at 44.54$/bbl
  • US gasoline crack up 0.4$/bbl at 23.82$/bbl
  • US ULSD crack down -0.5$/bbl at 85.94$/bbl