Crude Edging Higher Back Towards Flat on the Week

Crude is edging higher today having traded between about 92.2$/bbl and 94.5$/bbl yesterday. The downside pressure from the US Fed suggestion of another possible rate hike this year was countered by a rally in diesel markets in response to a temporary halt to Russian gasoline and diesel exports. Brent front month is almost flat on the week with support from OPEC+ cuts weighed against the uncertain global demand growth, especially for US and China.

• Brent NOV 23 up 0.4% at 93.68$/bbl
• WTI NOV 23 up 0.6% at 90.17$/bbl
• Gasoil OCT 23 down -1.2% at 994.5$/mt
• WTI-Brent up 0.11$/bbl at -3.51$/bbl
• The Russian government has introduced a temporary ban on the export of gasoline and diesel fuel effective immediately to stabilize the domestic market ahead of peak refinery maintenance. Several analysts suggest the ban will not last long with demand for the harvest set to peak in a few weeks.
• The OPEC+ supply cuts and robust demand are driving lower global inventory and expected to result in a market deficit in Q4. US stocks are still near the lowest since December and Cushing could be falling towards the minimum operation levels for the facility.
  • Brent NOV 23-DEC 23 up 0.01$/bbl at 1.05$/bbl
  • Brent DEC 23-DEC 24 up 0.23$/bbl at 8.84$/bbl
• The crude backwardation has softened from a peak on 19 Sep but time spreads remain elevated after a strong rally in July and August. The prompt Brent spread is back down from a peak of 1.43$/bbl and Dec23-Dec24 down from just over 10$/bbl.
• Diesel spreads pulled back yesterday after reports that Shell is trying to restart its shutdown hydrocracking unit at Pernis by 25 Sep and after the initial surge higher in response to the Russian export ban. Gasoline spreads continue to trend lower amid concern for the seasonal decline in demand.
  • US gasoline crack down 0$/bbl at 18$/bbl
  • US ULSD crack up 0.8$/bbl at 49.38$/bbl