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Crude Steadies After Two Day Decline


Crude steady after a two day decline from a peak of 86.7$/bbl on the back of oil demand growth concerns following hawkish comments from US Fed Chairman Powell. Powell said that the ultimate level of interest rates is likely to be higher and potentially increasing faster than previously anticipated.

    • Brent MAY 23 down -0.1% at 82.58$/bbl
    • WTI APR 23 down -0.1% at 76.57$/bbl
    • Gasoil MAR 23 down -0.1% at 808.5$/mt
    • WTI-Brent up 0.01$/bbl at -5.86$/bbl
  • An oil demand recovery in China and disruption to Russian output remain the main upside market risks. OPEC Secretary General Haitham Al Ghais said he was not concerned about the rerouting of Russian crude exports to countries such as China and India. He said that demand in China will grow 500k to 600kbpd in 2023.
  • Russia’s oil production in 2023 and 2024 looks steady despite EU sanctions following signs of robust exports and despite an expected decline of 0.7mb/d in March output according to EIA.
    • Brent MAY 23-JUN 23 unchanged at 0.47$/bbl
    • Brent JUN 23-DEC 23 down -0.02$/bbl at 2.44$/bbl
  • Crude time spreads have softened following the front month move lower but the move in near term spreads was more muted than longer term spreads. Weak near term demand still weighs on the prompt WTI spreads with the May-Jun spread joining Apr-Mar in contango.
  • Gasoline crack spreads are holding onto recent strength supported by the EIA stock draw yesterday and steady implied demand. Diesel spreads however remain weak with the warm winter contributing to the weak demand and building inventory levels at pressure prices lower.
    • US gasoline crack up 0.1$/bbl at 36.35$/bbl
    • US ULSD crack down -0.3$/bbl at 38.27$/bbl

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