Crude Stable as Products Stay Strong

Brent drifted down yesterday but remains around 120$/bbl with tight supply weighed against uncertain demand.

• Brent AUG 22 up 0.5% at 120.12$/bbl
• WTI JUL 22 up 0.5% at 119.15$/bbl
• Gasoil JUN 22 up 0.9% at 1365$/mt
• WTI-Brent down -0.04$/bbl at -3.38$/bbl
• Demand growth uncertainty is driven by economic headwinds, Chinese lockdowns and high prices but with China slowly emerging from lockdown restrictions their demand is expected to climb.
• Despite the announcement from OPEC to bring forward production increases, the supply remains tight. Spare global capacity is limited and there has so far been not significant production increase from US as drillers continue to maintain capital disciple.
• Spare capacity is even more limited in refined oil products which is helping to maintain record refining margins. The rally in crack spreads has taken a breather in the last couple of days but with low inventories, tight supply, and strong summer demand the trend is likely to stay bullish.
• Brent AUG 22-SEP 22 down -0.02$/bbl at 2.52$/bbl
• Brent DEC 22-DEC 23 down -0.49$/bbl at 15.71$/bbl