Crude Regains Ground After Falling on Demand Concerns Yesterday

Crude regains some ground after falling late yesterday following the updated weekly US inventory data. The JMMC committee yesterday as expected recommended OPEC keep production steady citing Russian sanctions and Chinese demand as the main market uncertainties. Economic driven demand concerns have weighed on the market recently as the US Fed raised interest rates again yesterday.

• Brent APR 23 up 0.6% at 83.32$/bbl
• WTI MAR 23 up 0.6% at 76.88$/bbl
• Gasoil FEB 23 down -1.2% at 871$/mt
• WTI-Brent down -0.13$/bbl at -6.15$/bbl
• EIA data yesterday showed US inventories built again after an unexpected drop in refinery utilisation, imports increased and refined product demand remains weak.
• The EU is aiming to agree a price cap on Russian oil products on Friday. The European Commission proposed last week a price cap of $100/bbl on premium products like diesel and $45 for products like fuel oil.
  • Brent APR 23-MAY 23 unchanged at 0.26$/bbl
  • Brent JUN 23-DEC 23 up 0.11$/bbl at 2.71$/bbl
• The backwardation in the forward curve is largely unchanged today. Spreads have softened slightly in recent days but remain supported ahead of the EU ban on Russian products from 5 Feb.
• Diesel and gasoline crack spreads continue the pull back from a peak on 24 Jan due to weak demand and despite concerns for the upcoming Russian sanctions and US refinery maintenance season. Fuel supplies to the New York Harbour area remain tight after another stock draw this week due to lower supplies from Europe.
  • US gasoline crack down -0.1$/bbl at 26.36$/bbl
  • US ULSD crack down -0.1$/bbl at 47.86$/bbl