Crude Falls on Concerns for Inflation and Chinese Demand

Brent fell sharply on Friday afternoon on demand growth concerns from monetary tightening after testing highs at 124$/bbl earlier in the day.

• Brent AUG 22 down -1.7% at 119.96$/bbl
• WTI JUL 22 down -1.7% at 118.56$/bbl
• Gasoil JUL 22 down -1.5% at 1262.5$/mt
• WTI-Brent up 0.03$/bbl at -3.94$/bbl
• Crude fell after the release of US CPI data showed increasing US inflation and raised the concerns for global growth. Crude continues to fall this morning on China’s zero Covid policy weighing on prices with the prospect that new restrictions may return to parts of Beijing and Shanghai. Mass testing has seen cases rising and a delay to schools reopening in Beijing.
• Curve backwardation and oil product cracks have also followed the flat price crude markets slightly lower. However, both time and crack spreads remain near record levels supported by tight supply. Missing Russian barrels, limited spare capacity and no signs of significant increases from US or OPEC are likely to keep markets tight despite potentially lower demand growth.
• Brent AUG 22-SEP 22 unchanged at 2.99$/bbl
• Brent DEC 22-DEC 23 down -0.67$/bbl at 14.52$/bbl
• Gasoline-Brent up 0.8$/bbl at 44.5$/bbl
• Gasoil-Brent down -1.37$/bbl at 44.25$/bbl