Crude Holding Steady Ahead of OPEC+ Meeting and Sanctions on Russia

Crude remains unchanged on the day ahead of the OPEC+ meeting over the weekend and with the EU ban on Russian seaborne crude coming into effect on Monday.

• Brent FEB 23 unchanged at 86.88$/bbl
• WTI JAN 23 down -0.2% at 81.02$/bbl
• Gasoil DEC 22 down -3.8% at 917$/mt
• WTI-Brent down -0.13$/bbl at -5.89$/bbl
• The OPEC+ group is expected to keep supplies unchanged at the meeting on Dec 4 although lower prices and weaker demand have increased the risk of further cuts. Even without any changes in targets, OPEC+ production could still decline due to lower Russian output following the EU ban and the oil price cap from Dec 5.
• EU members are getting closer to an agreement on a Russian oil price cap with a level of $60/bbl proposed. The level is not yet agreed though as Poland continues to push for more measures to pressure Russian revenues and wants new sanctions linked to the price cap plan.
• Crude gains this week have been supported by increased optimism over Chinese oil demand and signs for a slower pace of US Fed rate hikes.
  • Brent FEB 23-MAR 23 up 0.06$/bbl at 0.13$/bbl
  • Brent JUN 23-DEC 23 up 0.01$/bbl at 2.59$/bbl
• Prompt time spreads for crude have traded back positive after moving into contango earlier in the week due to healthy supply and weaker demand. Longer dated spreads have recovered from lows at the start of the week supported by China, Russia and OPEC uncertainty.
• Crack spreads are holding steady after falling yesterday on concern for weak demand. EIA data on Wednesday showed a fall in both US gasoline and diesel implied demand last week.
  • US gasoline crack up 0.2$/bbl at 17.31$/bbl
  • US ULSD crack up 0.6$/bbl at 55.91$/bbl