Crude Holds Onto Weekly Gains

Crude is steady near previous close levels after bouncing within a 2$/bbl range up to just over 77$/bbl yesterday as the market assesses the impact of central bank tightening and recession fears on global oil demand. An extended cut in Russian production and US plans for the SPR are adding to the market uncertainty.

• Brent MAY 23 up 0.3% at 76.15$/bbl
• WTI MAY 23 up 0.4% at 70.23$/bbl
• Gasoil APR 23 up 0% at 781.5$/mt
• WTI-Brent up 0.11$/bbl at -5.92$/bbl
• US Energy Secretary yesterday said it will be difficult to replenish strategic petroleum reserves this year and it could take years to fully restock the stores. The US had previously indicated the reserves could start to be refilled when prices fell below about 70$/bbl but 26mbbls of congress mandated withdrawals are already planned from April to June.
• Earlier this week Russia announced an extended cut in oil production of 500kbpd until the end of June with the aim to narrow the discount on its oil exports according to Russia’s Novak yesterday.
  • Brent MAY 23-JUN 23 up 0.01$/bbl at 0.42$/bbl
  • Brent JUN 23-DEC 23 down -0.09$/bbl at 1.39$/bbl
  • Brent DEC 23-DEC 24 down -0.04$/bbl at 2.62$/bbl
• Brent backwardation remains relatively unchanged with the time spreads holding onto gains seen this week since the lows on 20 March. The WTI time spreads have mostly returned into backwardation except for the May-Jun spread which remains negative.
• Gasoline margins yesterday regained most of the ground lost earlier this week with the European crack spread up towards the highs around 22$/bbl from 20 March. The recovery has been supported by the large US oil product inventory draws earlier this week and ongoing US gasoline demand strength. Restricted fuel supplies in Europe due to French strikes and Russian sanctions are adding to the tight near term concerns to offset wider market demand uncertainty.
  • US gasoline crack up 0.2$/bbl at 38.06$/bbl
  • US ULSD crack up 0.6$/bbl at 38.96$/bbl