Crude Stable as Tight Supplies Balance with Weaker Economic Growth

Crude holding near close levels with economic growth and recession fears weighed against tight market supplies.

• Brent DEC 22 up 0.3% at 94.81$/bbl
• WTI NOV 22 up 0.4% at 89.43$/bbl
• Gasoil NOV 22 up 1.1% at 1128.25$/mt
• WTI-Brent up 0.12$/bbl at -6.57$/bbl
• Downside pressure comes after another upside surprise in US CPI inflation data yesterday with further central bank tightening expected and US recession weighing on oil demand growth estimates. Demand from China also remains subdued due to ongoing covid restrictions but the increase in fuel export quotas for this year could help to boost growth.
• Elevated time spreads show that supplies remain tight with concerns over Russia supplies, OPEC+ target cuts, OPEC member underproduction and downgraded US output forecasts. Time spreads have drifted slightly lower this week but the Dec22- Dec23 is still near the highest since June and the near-term spreads just off from the highest since July.
  • Brent DEC 22-JAN 23 unchanged at 1.65$/bbl
  • Brent DEC 22-DEC 23 up 0.12$/bbl at 12.87$/bbl
• EIA weekly inventory data yesterday showed a big build in crude, a build in gasoline and a draw in diesel stocks. Diesel cracks spreads continue to rally with tight supplies and low stocks ahead of the northern hemisphere winter heating season and despite economic growth concerns. Gasoline cracks are slightly softer with higher stocks levels after the weak demand over the summer.
  • US 321 crack down -0.1$/bbl at 43.3$/bbl
  • US gasoline crack down -0.7$/bbl at 23.7$/bbl
  • US ULSD crack up 0.1$/bbl at 82.46$/bbl