Crude Holding Gains Supported by Weaker US Dollar

Crude is holding onto a small recovery from late yesterday supported by a weaker US dollar after volatile trading this week has seen front month Brent decline nearly 10%. Brent has twice bounced off the lows just below 72$/bbl this week. The focus remains on the financial market with concern for near term global oil demand offsetting the longer term expected recovery in Chinese demand.

• Brent MAY 23 up 0.5% at 75.09$/bbl
• WTI APR 23 up 0.5% at 68.7$/bbl
• Gasoil APR 23 up 2.7% at 770.25$/mt
• WTI-Brent unchanged at -6.19$/bbl
• Saudi and Russia agreed to enhance market stability and see no imbalance between demand and supply and expect the market to stabilise. OPEC are not reacting to the lower prices or suggesting any production cuts with the next monitoring committee meeting on 3 April.
• A US official yesterday said they won’t rush to replenish the SPR despite the recent price fall. They had previously suggested intent to start refilling with prices below 70$/bbl.
  • Brent MAY 23-JUN 23 down -0.02$/bbl at 0.39$/bbl
  • Brent JUN 23-DEC 23 up 0.04$/bbl at 1.56$/bbl
  • Brent DEC 23-DEC 24 up 0.08$/bbl at 2.45$/bbl
• The prompt Brent time spread remains fairly strong despite the decline in futures this week but the longer dated spreads are near the weakest since Dec 2021. The WTI prompt spread is still in contongo suggesting ample near term supplies. Uncertainty still surround Russian production although output is stronger than expected despite sanctions and the planned production cut in March.
  • US gasoline crack up 0.4$/bbl at 37.1$/bbl
  • US ULSD crack up 0.7$/bbl at 43.48$/bbl
• Diesel and gasoline margins are edging higher with fundamentals offsetting demand concerns. Gasoline support comes from lower US inventories this week, a gradual rebound in US gasoline demand, the ongoing refinery maintenance season and the switch to summer grade gasoline ahead of the increased demand expected during the summer driving season.