Crude Resumes Trend Lower

Crude surged higher yesterday on news of the suspension of the southern Druzbha pipline which sends supplies to Hungary, Czech Republic, and Slovakia. Prices then fell back after the pipeline operator Mero said it expected the flows to be restored within days.

• Crude has resumed the slow decline this morning with concerns for recession and global demand growth and with steady supply. The EIA lowered their US production forecast but still expects an 840kbpd increase next year and to reach an all time high during 2023.
  • Brent OCT 22 down -0.8% at 95.57$/bbl
  • WTI SEP 22 down -1% at 89.57$/bbl
  • Gasoil AUG 22 down -0.9% at 989.25$/mt
  • WTI-Brent down -0.07$/bbl at -6.77$/bbl
• Backwardation continues to slow with spreads still trending lower this morning. The return of Libya supply, stronger than expected Russia supply, the ongoing US SPR release, a show of willing from OPEC and hope from Iran nuclear talks have all helped push spreads lower in recent weeks.
  • Brent OCT 22-NOV 22 down -0.04$/bbl at 1.42$/bbl
  • Brent DEC 22-DEC 23 down -0.21$/bbl at 7.23$/bbl
• Crack spreads rallied on the Druzbha pipeline suspension news but are easing back very slightly this morning. Supplies and stocks remain tight but demand so far looks weak despite the fall in US pump gasoline prices back below $4/gal.
  • US 321 crack up 0.2$/bbl at 39.37$/bbl
  • US gasoline crack up 0.2$/bbl at 34.33$/bbl
  • US ULSD crack up 0.1$/bbl at 49.46$/bbl