Crude Lowest since Jan on China Demand Concern

Crude is falling to the lowest since the start of the year on weak oil demand growth expectations. Global economic recession fears are already weighing on the market and Chinese covid restrictions and protests are adding to global growth concerns, the US dollar strength and downside pressures on oil.

• Brent JAN 23 down -3% at 81.15$/bbl
• WTI JAN 23 down -2.9% at 74.08$/bbl
• Gasoil DEC 22 down -3.4% at 885$/mt
• WTI-Brent up 0.22$/bbl at -7.05$/bbl
• EU members are expected to meet again today after failing to come to an agreement on the Russia oil cap details last week. Poland, Estonia and Lithuania consider the proposed cap of around 65-70$/bbl not low enough with current Urals pricing below this level. The G7 price cap announcement is waiting on the outcome of the EU discussions. Russian have said they will not supply fuel to any nation implanting a price cap with a possibility of presidential decree to ban supplies to such countries and companies.
• Time spreads are following crude lower with the prompt spread in contango reflecting oil demand concerns and short term strong supplies from Russian ahead of the EU oil ban on Dec 5. The Jun23-Dec23 and the Dec23-Dec24 spreads are both trading at the lowest level since January having peaked in early June.
  • Brent JAN 23-FEB 23 down -0.17$/bbl at -0.25$/bbl
  • Brent JUN 23-DEC 23 down -0.43$/bbl at 2.11$/bbl
• Crack spreads are seeing support today recovering some ground lost on Friday. Refined product crack spreads have been holding steady this month as short term extra supplies and future demand concerns offset the limited refining capacity and low stock levels. The ability to replenish depleted distillate stock levels have been hampered by limited spare refining capacity and recent robust demand.
  • US gasoline crack up 0.1$/bbl at 19.27$/bbl
  • US ULSD crack up 1.5$/bbl at 58.16$/bbl