Crude Holds Steady With Uncertain Global Demand

Crude is holding steady as front month Brent bounces between about 74.6$/bbl and 77.1$/bbl this week as the market assesses the future demand growth in China and US.

• Brent AUG 23 up 0.2% at 76.05$/bbl
• WTI AUG 23 up 0.3% at 71.38$/bbl
• Gasoil JUL 23 up 0.5% at 714.75$/mt
• WTI-Brent down -0.03$/bbl at -4.67$/bbl
• China is gradually introducing stimulus measures after recent data has suggested a weaker than expected economic growth. China is largely considered as the main driver of global oil demand growth in the second half of this year. CNPC expect crude oil demand to grow by +3.5% to 740m metric tons this year, slower than +5.1% previously expected.
• The potential for further US Fed interest rate cuts due to persistent inflation remains a downside risk to crude markets while the OPEC production cuts are providing support. Fed Chair Powell is due to for his semi- annual report to Congress later today.
• Strong crude output from sanctioned countries adds downside pressure as Russian seaborne crude exports are edging down but are still 250kbpd higher than the February baseline for the pledged 500kbd production cuts.
  • Brent AUG 23-SEP 23 up 0.01$/bbl at 0.02$/bbl
  • Brent DEC 23-DEC 24 unchanged at 3.02$/bbl
• The crude time spreads are keeping the curve in narrow backwardation with the prompt spreads holding just above parity. Dec23-Dec24 spreads have edged higher in the last week but remain at the lower end of the range seen so far this year.
• Gasoil cracks and time spreads continue to pull back from the highs seen late last week with tight supplies easing as refineries return to service. Gasoline crack spreads are also edging slightly lower with concern for weak demand but are still higher this month with support from low US inventories.
  • EU Gasoline-Brent down -0.7$/bbl at 21.56$/bbl
  • EU Gasoil-Brent down -0.2$/bbl at 18.38$/bbl