Crude Extends Monthly Fall on China Demand Concern

Crude continues the decline from last week on the back of concern for China oil demand amid rising covid cases, the weak global economic growth prospects, central back tightening, and a stronger US dollar. Brent is trading at the lowest since just before the OPEC+ production cut announcement in early October which caused a rally up towards 100$/bbl.

• Brent JAN 23 down -0.6% at 87.11$/bbl
• WTI JAN 23 down -0.5% at 79.72$/bbl
• Gasoil DEC 22 up 0.3% at 949$/mt
• WTI-Brent up 0.25$/bbl at -7.36$/bbl
• The prompt time spreads fell last week with WTI turning to contango with weaker demand and healthy short term supplies ahead of the Dec22 futures contract expiry today. Further out along the forward curve is still in strong backwardation despite an easing of the spreads over the last couple of weeks. Global crude supply risks due to Russia output uncertainty following the EU ban and G7 price cap from Dec 5 are supporting longer dated spread.
  • Brent JAN 23-FEB 23 down -0.04$/bbl at 0.43$/bbl
  • Brent JUN 23-DEC 23 down -0.11$/bbl at 3.32$/bbl
• Refined product crack spreads are holding steady despite the falling crude prices. Low global supplies and stocks levels are supporting the spreads. Refiners are not managing to replenish low global distillate stocks due to limited refining capacity and recent robust demand.
  • US gasoline crack up 0.1$/bbl at 21.59$/bbl
  • US ULSD crack down -0.9$/bbl at 66.73$/bbl