Crude Holds Gains on Russian Export Decline Potential China Support

Crude front month is holding onto most of the gains from yesterday having reached a peak around 79.7$/bbl on the back of signs of lower Russian exports and the potential for further China policy support measures.

• Brent SEP 23 down -0.1% at 79.29$/bbl
• WTI AUG 23 down -0.1% at 74.75$/bbl
• Gasoil AUG 23 down -0.4% at 745.75$/mt
• WTI-Brent up 0.02$/bbl at -4.68$/bbl
• EIA expects the global oil market to tighten this year with a drop in production due to OPEC+ cuts and with a consumption boost from China’s stimulus plan after a lagging economic recovery.
• Russian crude exports are showing signs of a decline with seaborne crude flows falling just over 1mbpd on the week to 2.86mbpd according to Bloomberg. Most of the decline was from ports in western Russia with volumes below the average February level.
• Upside moves are still limited by global economic concerns and with USD sentiment under pressure. The US CPI data is due out today with the Fed potentially looking to raise interest rates at the upcoming July meeting. Onshore media in China highlighting local analysts is calling for more fiscal stimulus in H2.
  • Brent SEP 23-OCT 23 up 0.02$/bbl at 0.35$/bbl
  • Brent DEC 23-DEC 24 down -0.01$/bbl at 3.78$/bbl
• The crude time spreads followed the move higher with Brent Sep-Oct back up just below the highs seen at the start of the week. The prompt WTI spread is the highest since early May reflecting the tighter supplies.
• Diesel and gasoline crack spreads are holding steady ahead of the updated EIA weekly US data due out later today with support from low inventory levels but with implied demand still in focus. US Gulf Coast diesel exports to Europe are on track to hit the highest monthly rate since at least 2017 amid soft domestic consumption.
  • US gasoline crack up 0.3$/bbl at 35.48$/bbl
  • US ULSD crack down 0$/bbl at 33.43$/bbl