Crude Holding Weaker Sentiment on Global Demand Concerns

Crude is slightly down on the day after falling yesterday driven by concern for Chinese demand, recession fears and a build in US crude stocks. Speculation that China might ease their Covid Zero policy has reduced with covid cases rising and lockdowns spreading. Economic concerns are balanced against tight physical supplies ahead of the updated US inflation data later today.

• Brent JAN 23 down -0.5% at 92.23$/bbl
• WTI DEC 22 down -0.6% at 85.31$/bbl
• Gasoil DEC 22 down -2% at 987.75$/mt
• WTI-Brent down -0.15$/bbl at -7.73$/bbl
• Time spreads have pulled back slightly with the less optimistic outlook for Chinese demand, but the curve remain in strong backwardation. The future output from Russian remains unclear with less than a month until the start of the EU ban on Russian oil. Existing Russian crude shipments to Europe will need to find alternative buyers or will be missing from the global supplies.
  • Brent JAN 23-FEB 23 down -0.02$/bbl at 1.42$/bbl
  • Brent JUN 23-DEC 23 down -0.03$/bbl at 4.12$/bbl
• Refined product crack spreads are also holding steady today after distillate cracks drifted lower following the weaker global demand expectations. Gasoline cracks rallied following the EIA inventory data showing the lowest stocks since 2012 and a small recovery in the implied demand data.
  • US gasoline crack up 0.6$/bbl at 21.66$/bbl
  • US ULSD crack down -0.1$/bbl at 67.14$/bbl