Crude Holds Steady with Uncertain Supply Demand Balance

Crude is holding steady with front month Brent trading between about 75.1$/bbl and 76.9$/bbl since late last week as the market assesses the uncertain supply demand balance with low volumes traded yesterday due to the US holiday.

• Brent AUG 23 down -0.3% at 75.88$/bbl
• WTI AUG 23 down -1.1% at 71.12$/bbl
• Gasoil JUL 23 down -0.8% at 726$/mt
• WTI-Brent down -0.17$/bbl at -4.77$/bbl
• Upside pressure comes from OPEC supply cuts and potential China stimulus measures and is weighed against current weak demand growth expectations amid possible further central back rate tightening and strong exports from sanctioned countries.
• A meeting on Monday between a Turkish energy technical delegation and Iraqi oil officials did not result in a decision to resume oil flows via Ceyhan and further talks will be needed.
• Russian refineries crude-processing volumes are increasing again towards the end of the maintenance season after a dip lower during May.
  • Brent AUG 23-SEP 23 unchanged at 0.03$/bbl
  • Brent DEC 23-DEC 24 down -0.02$/bbl at 3.14$/bbl
• The crude time spreads have edged higher in recent days with the Aug-Sep Brent and WTI spreads back into a narrow backwardation. Longer term spreads have moved slightly stronger but remain at the lower end of the range seen so far this year.
  • US gasoline crack down 0$/bbl at 40.28$/bbl
  • US ULSD crack down -0.4$/bbl at 34.01$/bbl
• Diesel crack spreads eased lower yesterday with refineries in Europe expected to restart this week. The Europe Gasoil-Brent spread and prompt Gasoil time spread both saw a strong rally last week driven by refinery outages while falling Rhine river levels are starting to restrict trade. Gasoline crack spreads are also holding recent gains with support from driving season demand and low US inventories.