Crude Holding Steady After Rally on China Recovery Expectation

Crude holding steady after trading higher over the previous two days with upside risks driven by the expected demand recovery in China.

• Stronger manufacturing activity data from China yesterday adds to the gaining mobility indications this year to support the oil demand optimism. Weaker than expected US ISM data yesterday however renewed global demand growth concerns with a US economic slowdown limiting any attempts for crude to push higher.
  • Brent MAY 23 down -0.3% at 84.08$/bbl
  • WTI APR 23 down -0.3% at 77.44$/bbl
  • Gasoil MAR 23 up 0.1% at 840$/mt
  • WTI-Brent up 0.01$/bbl at -6.5$/bbl
• The EIA weekly petroleum inventory data released yesterday showed an increase in gasoline implied demand as crude stocks built despite record exports with another dip in refinery utlisation.
• Crude forward curve backwardation is holding strong supported by Russian oil supply risks with production cuts in March . The prompt Brent time spread is at the highest since November after gaining again yesterday. The prompt WTI spread is holding steady still in contango suggesting ample near term US supplies.
  • Brent MAY 23-JUN 23 up 0.01$/bbl at 0.63$/bbl
  • Brent JUN 23-DEC 23 up 0.01$/bbl at 2.95$/bbl
• Diesel and gasoline cracks dip lower this morning but are holding the trend higher to recovery from the lows on 17 Feb. The recovery in refined product margins.is supported by an expected reduction in gasoil shipments from China in March, the US and Asia refinery maintenance season, Russian product supply uncertainty and higher transportation costs due to longer shipment distances.
  • US gasoline crack down -0.2$/bbl at 34.45$/bbl
  • US ULSD crack down -0.6$/bbl at 42.21$/bbl