Crude Holding Steady with Weaker Demand Set Against Russia Supply Concerns

Crude is holding steady today after dipping 3$/bbl lower yesterday before recovering ahead of the FOMC this week. A stronger dollar and concerns that central bank tightening and weaker economic growth will dent oil demand are pressuring oil markets to the downside.

• Brent NOV 22 up 0.4% at 92.35$/bbl
• WTI NOV 22 up 0.3% at 85.58$/bbl
• Gasoil OCT 22 up 1.4% at 976.5$/mt
• WTI-Brent down -0.04$/bbl at -6.76$/bbl
• In a statement yesterday the US offered an additional 10mbbld of crude release from strategic reserves during November after the completion of the current 180mbbls release.
• The UAE is accelerating its plan to increase its oil production capacity to be able to produce 5mbpd of crude by 2025 from a previous date of 2023. UAE production target from OPEC is 3.179mbpd in October.
  • Brent NOV 22-DEC 22 up 0.04$/bbl at 1.38$/bbl
  • Brent DEC 22-DEC 23 up 0.22$/bbl at 10.23$/bbl
• Future supply uncertainty continues to support crude time spreads. Output from Russia this year has been more robust that initially thought following sanctions however the introduction of the EU ban on their seaborne crude in December may start to limit buyers of Russian barrels.
  • US 321 crack up 0.2$/bbl at 30.31$/bbl
  • US gasoline crack up 1.4$/bbl at 17.76$/bbl
  • US ULSD crack down 0$/bbl at 53.7$/bbl
• Refining margins are relatively stable today after ticking up yesterday following crude higher later in the day. Demand concerns have weighed on both gasoline and distillate crack spreads in the last month bringing spreads nearly 10$/bbl lower since mid August.