Crude Holding in Range on Weak Demand and Supply Risks

Crude holding steady after volatile trading in the 91$/bbl to 94.3$/bbl range in recent days. Concern for a global slowdown and weak Chinese oil demand this year adds to downside pressures while potential missing Russian barrels and OPEC production cuts adds upside risks.

• Brent DEC 22 up 0.2% at 93.47$/bbl
• WTI DEC 22 up 0.3% at 84.85$/bbl
• Gasoil NOV 22 down -0.5% at 1077$/mt
• WTI-Brent down -0.03$/bbl at -8.61$/bbl
• Russian seaborne flows to Europe are slowly decreasing ahead of the EU ban on Dec 5. Crude supply to Europe (excluding Turkey) has more than halved since February down to approximately 0.75mbpd.
• The supply risks are keeping the crude forward curve in strong backwardation. Time spreads have eased back slightly from yesterday but are still trading near the highest since July.
  • Brent DEC 22-JAN 23 down -0.09$/bbl at 1.96$/bbl
  • Brent JAN 23-FEB 23 unchanged at 1.78$/bbl
  • Brent DEC 22-DEC 23 down -0.11$/bbl at 12.31$/bbl
• Tight diesel supplies, low storage and expected winter demand are supporting diesel crack spreads. Refinery outages due to maintenance and strikes have limited the supply of refined products although the supply situation in France is easing after the end to some strikes last week.
  • US 321 crack down -0.2$/bbl at 35.39$/bbl
  • US gasoline crack down -0.3$/bbl at 20.08$/bbl
  • US ULSD crack down -0.1$/bbl at 66$/bbl