Crude Egdes Lower as Market Considers Impact of US Fed

Crude edges lower but is still holding onto most of the gains from yesterday as the market continues the recovery from the lows just above 70$/bbl at the start of the week.

• Brent MAY 23 down -0.7% at 76.14$/bbl
• WTI MAY 23 down -0.8% at 70.33$/bbl
• Gasoil APR 23 down -0.4% at 781.75$/mt
• WTI-Brent up 0.01$/bbl at -5.83$/bbl
• Recession fears are weighing on global oil demand growth with concern for the impact of central back tightening after US Fed as expected raised rates 25 basis points and added there won’t be cuts this year. Also, Treasury Secretary Yellen said there’s unlikely to be a “blanket” deposit insurance scheme.
• Russian supply uncertainty remains an upside risk following the plans announced on 21 March to extend the March 500kbpd production cut until the end of June. Russian oil exports have maintained much higher than expected since the introduction of sanctions in December and February.
  • Brent MAY 23-JUN 23 up 0.02$/bbl at 0.33$/bbl
  • Brent JUN 23-DEC 23 down -0.12$/bbl at 1.57$/bbl
• Brent backwardation remains relatively unchanged with the time spreads holding onto gains seen this week since the lows on 20 March. The WTI time spreads have mostly move back into positive territory bringing the curve into backwardation except for the May-Jun spread which remains negative.
• US inventory data yesterday showed a big draw in gasoline and diesel stocks reflecting higher domestic consumption and the restricted output in Europe due to French strikes. Gasoline margins are stronger following the data, but diesel remains steady weighed down by the market demand concerns.
  • US gasoline crack up 0.4$/bbl at 36.94$/bbl
  • US ULSD crack up 0.1$/bbl at 38.73$/bbl