Crude Recovers on Demand Uncertainty

Brent traded down to the 50-day moving average level of 111.7$/bbl yesterday before bouncing back to 115$/bbl this morning. Crude was already recovering slowly after the fall from 121$/bbl on Friday and then comments from Biden that a recession is not inevitable helped push crude up further.

• Brent AUG 22 up 0.7% at 114.92$/bbl
• WTI AUG 22 up 1.7% at 109.8$/bbl
• Gasoil JUL 22 up 0.8% at 1327.25$/mt
• WTI-Brent up 0.34$/bbl at -5.12$/bbl
• Diesel crack prices traded to new record highs again yesterday as refined product prices maintained strength relative to crude. US have made it clear they will consider all options and ideas to increase output and help lower pump prices. Energy Secretary Granholm is due to meet oil industry officials on Thursday to discuss ways to increase output. Biden is expected to decide this week whether to suspend the federal gasoline tax to ease the pressure of record fuel pump prices.
• US gasoline crack up 0.4$/bbl at 50.97$/bbl
• US ULSD crack up 0.5$/bbl at 77.23$/bbl
• The impact of sanctions on Russian output is still unclear with varying reports of production levels. Asia is filling much of the gap left by Europe and reports suggest European refiners are taking the highest volume of Russian seaborne crude in almost 2 months. The limited global supply is keeping the forward curve backwardated with spreads following the flat price recovery later yesterday and this morning.
• Brent AUG 22-SEP 22 up 0.06$/bbl at 2.83$/bbl
• Brent DEC 22-DEC 23 up 0.1$/bbl at 12.17$/bbl