Crude Stable as Economic Slowdown Weighed Against Tight Supplies

Crude remains stable this morning after edging higher in volatile trading yesterday after US dollar weakness added to price support and as the market weighs the possibility of changes to the Chinese covid policy. Confirmation over the weekend that the zero-Covid policy will remain in place has so far limited any upside moves. Any easing to restrictions will add to Chinese oil demand and support crude prices.

• Brent JAN 23 down -0.1% at 97.86$/bbl
• WTI DEC 22 down -0.2% at 91.63$/bbl
• Gasoil NOV 22 down -2.5% at 1068.75$/mt
• WTI-Brent down -0.08$/bbl at -7.28$/bbl
• The possibility of a recovery in Chinese oil demand is adding to the tight market supply situation to push time spreads higher. OPEC+ target production cuts and concern for Russian output following EU sanctions also support the tight physical supplies. The Jun23-Dec23 spread has increased to the highest since mid June whilst the Dec23-Dec24 yesterday reached the highest since early September.
  • Brent JAN 23-FEB 23 down -0.01$/bbl at 1.55$/bbl
  • Brent JUN 23-DEC 23 down -0.01$/bbl at 4.75$/bbl
  • Brent DEC 23-DEC 24 up 0.01$/bbl at 6.2$/bbl
• Diesel and gasoline crack spreads are drifting back lower after surging higher last week. Tight supplies and low stocks continue to support spreads with diesel spreads about three time higher than start of year levels. Concerns for the impact of high prices and an economic recession on oil demand growth are limiting the upside moves.
  • US gasoline crack up 0$/bbl at 19.67$/bbl
  • US ULSD crack down -0.1$/bbl at 66.69$/bbl