Crude Lower on Iran Nuclear Deal Prospects and China Disruptions

Crude trading lower this morning on the prospect of progress in agreeing a nuclear deal with Iran.

• Ove the weekend President Biden spoke to France, Germany and UK about reviving the Iran deal with unconfirmed reports of potential US concessions. Al Jazeera reported a deal as “imminent” with plans for Iran to export crude “within 120 days of signing the agreement”.
• Adding to the downward pressure on prices are industrial power cuts and emergency measure in China’s Sichuan province due to high demand fuel by hot temperatures.
  • Brent OCT 22 down -1.6% at 95.22$/bbl
  • WTI OCT 22 down -1.6% at 88.97$/bbl
  • Gasoil SEP 22 down -1.4% at 1072$/mt
  • WTI-Brent down -0.01$/bbl at -6.25$/bbl
• An Iran nuclear deal would add to the easing tight crude supply conditions which have driven time spreads down towards the pre Ukraine invasion levels. Spreads across the curve are continuing to trade lower this morning.
  • Brent OCT 22-NOV 22 down -0.15$/bbl at 0.48$/bbl
  • Brent DEC 22-DEC 23 down -0.48$/bbl at 7.61$/bbl
• Refined products spreads are also drifting lower this morning after diesel rallied for much of last week on tight supply, low stocks and improved US demand data. Uncertainty over the impact of high pump prices remains but the pull back in retail prices over the last two months is likely to have provided some support to demand.
  • US 321 crack down -0.8$/bbl at 44.74$/bbl
  • US gasoline crack down -1$/bbl at 34.98$/bbl
  • US ULSD crack down -0.4$/bbl at 64.26$/bbl