Crude Holding Within Recent Range on Demand and Supply Uncertainty

Brent crude front month is holding within yesterday’s range of about 81.8$/bbl to 83.6$/bbl with no clear trading direction. Inflation concerns and further central bank tightening are limiting global demand expectations and combined with the stronger US dollar are limiting any upside price moves.

• Brent MAY 23 up 0.7% at 82.6$/bbl
• WTI APR 23 up 0.8% at 76.26$/bbl
• Gasoil MAR 23 up 0.7% at 832.25$/mt
• WTI-Brent up 0.05$/bbl at -6.65$/bbl
• A potential boost to demand from a China recovery and near term supply issues with the Russian production cut in March remain the upside risks. Many analysts have recently reduced price forecasts for this year due to robust Russian output and the weak economy. The market however remains cautious of the upside risk highlighted by a gradual closing of the Brent put skew and increasing Brent managed money net long positions.
  • Brent MAY 23-JUN 23 up 0.04$/bbl at 0.57$/bbl
  • Brent JUN 23-DEC 23 up 0.11$/bbl at 2.64$/bbl
• The crude time spreads also remain in backwardation suggesting tight supplies except for the prompt WTI spread which is still in contango despite closing in to -0.11$/bbl yesterday. The spreads are holding in the middle of the range for the year.
• Diesel crack spreads continues to regain ground today with support due to US and Asian refinery maintenance and with the ongoing upside risk of Russia supply disruption.
  • US gasoline crack up 0.4$/bbl at 33.17$/bbl
  • US ULSD crack up 0.3$/bbl at 42.16$/bbl