Crude Falls to Weekly Low on Potential US Fed Tightening

Crude futures extend the decline from yesterday with the impact of persistent inflation and the potential for further US Fed rate hikes adding bearish pressure to offset the limited economic support measures introduced by China. A draw in US crude stocks added some support yesterday but front month Brent has still fallen to the lowest of the week at 73.3$/bbl from a high of 77.2$/bbl on 21 June.

• Brent AUG 23 down -0.9% at 73.48$/bbl
• WTI AUG 23 down -1% at 68.8$/bbl
• Gasoil JUL 23 down -0.9% at 705.25$/mt
• WTI-Brent unchanged at -4.67$/bbl
• On the supply side, OPEC production cuts and the voluntary additional cuts from Saudi Arabia starting next month are providing support but output from the sanctioned countries of Iran and Russia is strong.
• Crude extends the decline with the Brent Aug-Sep spread falling further into contango on weak global demand. Crude curve backwardation remains soft with the Dec23-Dec24 yesterday falling back towards the lowest of the month at 2.37$/bbl from 12 June.
  • Brent AUG 23-SEP 23 up 0.03$/bbl at -0.18$/bbl
  • Brent DEC 23-DEC 24 down -0.14$/bbl at 2.56$/bbl
• Diesel and gasoline crack spreads have seen some support following the increase in the weekly US implied demand data released yesterday. Diesel spreads have recovered from a low on 21 June with weak demand weighed against tighter supplies due to recent refinery outages but with increased exports expected from China. Gasoline spreads are down this week following the rally last week in reaction to the Bayway outage.
  • US gasoline crack down -0.3$/bbl at 34.04$/bbl
  • US ULSD crack down -0.4$/bbl at 31.39$/bbl