Crude Recovers Slightly after Positive Signs in China Imports

Crude is ticking higher this morning after falling last week with ongoing recession fears and easing supply tightness.

• Stronger than expected US payrolls data on Friday and a pick up in China import data showing some recovery in oil demand are supporting prices. China crude imports for July increased from the lowest in 4 years in June but were still down 4% year to date.
• In a note over the weekend Goldman Sachs cut its near term forecast for oil. They lowered the Q3 forecast to $110/bbl from $140/bbl, and the Q4 forecast to $125/bbl, from $130/bbl. The 2023 outlook was unchanged at $125/bbl. They say the lower prices are driven by low liquidity, recession concerns, China zero-covid policy, US SPR release and recovering Russian production.

• Brent OCT 22 up 0.8% at 95.69$/bbl
• WTI SEP 22 up 0.7% at 89.67$/bbl
• Gasoil AUG 22 down -3.3% at 957$/mt
• WTI-Brent down -0.02$/bbl at -6.88$/bbl
• Crude time spreads are steady this morning having gradually fallen over the last few weeks. Signs that Russian production is stronger than originally expected has combined with returning Libya supplies and a show of willing from OPEC with a small September increase to help ease the tight supply situation slightly.
  • Brent OCT 22-NOV 22 down -0.07$/bbl at 1.67$/bbl
  • Brent DEC 22-DEC 23 up 0.25$/bbl at 7.75$/bbl
• Gasoline and diesel crack spreads continue to drift lower with weak demand data due to high pump process and wider recession concerns bring spreads down from their June highs.
  • US gasoline crack down -0.2$/bbl at 31$/bbl
  • US ULSD crack down -1.3$/bbl at 44.63$/bbl