Crude Softer As Demand Concerns Limit Upside Moves

Crude is slightly down on the day, but Brent is still holding within the 83.5$/bbl to 86.0$/bbl range seen this week following a surge higher in response to the OPEC production cut announcement last weekend. Global demand concerns are limiting any upside moves after some disappointing economic data from the US this week as the market assesses the impact of the supply reduction from next month.

• Brent JUN 23 down -0.5% at 84.59$/bbl
• WTI MAY 23 down -0.5% at 80.17$/bbl
• Gasoil APR 23 down 0% at 788.75$/mt
• WTI-Brent down -0.01$/bbl at -4.39$/bbl
• Many analysts suggest the cuts will increase the expected market deficit in the second half of this year, but uncertainty continues to be driven by recession risks, future Russian output, and the potential China demand recovery.
• Saudi Arabia yesterday hiked official selling prices for all of its oil sales to Asian customers for May after the kingdom led the surprise OPEC+ output cut.
  • Brent JUN 23-JUL 23 down -0.02$/bbl at 0.35$/bbl
  • Brent JUN 23-DEC 23 down -0.08$/bbl at 3.36$/bbl
  • Brent DEC 23-DEC 24 down -0.12$/bbl at 5.43$/bbl
• Crude time spreads are slightly softer today after a rally which pushed crude backwardation to the steepest this year on tighter supply concerns with spreads following the moves in the futures. The Dec23-Dec24 spread has drifted off from the highest since November of 5.94$/bbl on 4 April.
• Diesel and gasoline margins are steady today after seeing a strong rally yesterday with EIA weekly data showing oil product stock draws and higher implied demand. US gasoline demand has resumed the trend higher seen earlier this year to bring the four week average back above the five year average.
  • US gasoline crack down 0$/bbl at 38.1$/bbl
  • US ULSD crack down -0.3$/bbl at 33.94$/bbl