Crude Recovers Previous Losses on China Optimism

MNI (London) - Crude is recovering ground lost on Friday with support from a weaker US dollar, a possible Chinese recovery and Russian supply uncertainty.

• Brent MAR 23 up 1.6% at 79.85$/bbl
• WTI FEB 23 up 1.7% at 75.04$/bbl
• Gasoil JAN 23 down -0.2% at 878.75$/mt
• WTI-Brent unchanged at -4.54$/bbl
• Uncertainty over Chinese demand is impacting market moves with short term concerns over the impact of high covid cases numbers and longer term optimism for a recovery following the easing of covid restrictions with potential government support to the economy.
• Concern for global economic growth continues to limit any upside moves while OPEC+ could be encouraged to adjust production targets if demand and prices fall lower.
• US are delaying the start of purchases of the strategic petroleum reserves with recent offers for Feb delivery either too expensive or didn’t meet requirements.
  • Brent MAR 23-APR 23 down -0.02$/bbl at -0.2$/bbl
  • Brent JUN 23-DEC 23 down -0.01$/bbl at 1.59$/bbl
• Prompt time spreads remain soft and in contango suggesting ample near term supplies due to weak demand. The remainder of the curve is in backwardation with a potential demand recovery and supply uncertainty supporting prices.
• Diesel and gasoline crack spreads are generally holding steady with weak demand offset against concern for global supplies following the EU ban on oil products from next month providing upside pressure. The return of the Colonial pipeline over the weekend will help ease supplies to the New York Harbour region.
  • US gasoline crack up 0.6$/bbl at 21.07$/bbl
  • US ULSD crack down -0.8$/bbl at 51.94$/bbl