Crude Holding Steady As EU Considers Russian Oil Cap Proposal

Crude holding steady as the market balances economic concerns and the impact of rising covid restrictions in China on oil demand against Russian supply uncertainty. Yesterday crude initially rallied as OPEC members confirmed commitment to production targets and was supported by a weaker US dollar. Late in the day details of the draft EU oil price cap plan emerged suggesting a softening of proposals bringing prices back down.

• Brent JAN 23 up 0.4% at 88.68$/bbl
• WTI JAN 23 up 0.3% at 81.23$/bbl
• Gasoil DEC 22 down -0.3% at 940$/mt
• WTI-Brent down -0.12$/bbl at -7.45$/bbl
• EU proposals softened the oil price cap plan with the inclusion of a 45 day transition period and easing of shipping provisions. The transition period would apply to oil loaded before Dec 5 but unloaded by Jan19. EU are due to discuss the proposals and price level at a meeting today with a G7 and EU announcement potentially later today if the members agree.
  • Brent JAN 23-FEB 23 up 0.07$/bbl at 0.73$/bbl
  • Brent JUN 23-DEC 23 up 0.1$/bbl at 3.43$/bbl
• Time spreads remain unchanged today after the prompt gained ground yesterday on the Russian supply concerns and with no changes currently expected in OPEC output.
• Diesel and gasoline crack spreads are edging lower with demand concerns limiting upside moves due to low stocks and tight supplies.
  • US gasoline crack down -0.2$/bbl at 21.53$/bbl
  • US ULSD crack up 0$/bbl at 60.22$/bbl