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Crude Regains Ground After Falling Through Support Levels Yesterday

OIL

Crude has regained some ground after falling through technical support levels to the lowest since Dec 2021 to reach a low of 71.77$/bbl yesterday. The move has been driven by the financial market fears following the collapse of Silicon Valley Bank. The latest concern eased slightly after the central bank offered Credit Suisse liquidity allowing crude to recover back above 74$/bbl.

    • Brent MAY 23 up 0.8% at 74.26$/bbl
    • WTI APR 23 up 0.6% at 68.03$/bbl
    • Gasoil APR 23 up 2.3% at 750.75$/mt
    • WTI-Brent down -0.06$/bbl at -6.06$/bbl
  • The second month Brent call-put skew fell to the lowest since Dec 2021 with the market looking for increasing downside protection.
  • IEA yesterday raised the forecast for global oil supply by 0.3mbpd to 101.6mbpd and demand by 0.1mbpd to 102mbpd. They expect supply growth to meet demand in the first half of this year but falling short in the second half when seasonal trends and China’s recovery are set to boost demand to record levels.
  • EIA weekly stock data yesterday showed a build in crude inventories and draws in distillates and gasoline stocks as expected with a recovery in refinery utilisation and higher oil exports.
    • Brent MAY 23-JUN 23 up 0.04$/bbl at 0.45$/bbl
    • Brent JUN 23-DEC 23 up 0.06$/bbl at 1.53$/bbl
    • Brent DEC 23-DEC 24 up 0.09$/bbl at 2.28$/bbl
  • Long dated time spreads continue to follow the flat price moves as the curve backwardation softens. The Dec23-Dec24 spread yesterday traded down towards the Dec 2022 lows as global economic concerns outweigh optimism for Chinese demand.
  • Diesel and gasoline margins remain relatively stable despite the crude volatility. Gasoline is supported by a gradual rebound in US demand this year and the switch to summer grade gasoline. The refinery maintenance season has also provided support to refined products along with lower diesel exports from Asia and the Russia output uncertainty.
    • US gasoline crack down -0.2$/bbl at 35.14$/bbl
    • US ULSD crack down -0.2$/bbl at 40.98$/bbl
Energy BulletsCommodities
Energy BulletsCommodities

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