Crude Steadies As Weak Demand Weighs on Prices

Crude futures are edging higher after a fall yesterday on global economic concerns and the risk of further central bank rate hikes despite better than expected new home sales and consumer confidence data from the US. The ECB yesterday said they won’t be able to end the rate hike cycle anytime soon.

• Brent AUG 23 up 0.3% at 72.5$/bbl
• WTI AUG 23 up 0.4% at 67.96$/bbl
• WTI-Brent up 0.06$/bbl at -4.58$/bbl
• The voluntary production cut of 1mbpd from Saudi production is set to take place from next month and is considered likely to extend beyond July to provide some support.
• The Brent/Dubai EFS spread has this month narrowed to the lowest since Jan 2021 due to OPEC+ voluntary production cuts and higher US availability pushing down the Northwest Europe market. The July Brent-Dubai swap fell to -10c/bbl according to Bloomberg Fair Value data.
  • Brent AUG 23-SEP 23 down -0.01$/bbl at -0.26$/bbl
  • Brent DEC 23-DEC 24 up 0.04$/bbl at 1.9$/bbl
• The prompt Brent time spread has ticked back up from the lowest level since January at -0.29$/bbl but remains in contango while the Sep-Oct time spread has also fallen into negative territory this week. Dec23-Dec24 spread is holding onto the losses from yesterday having reached the lowest since Dec 2021.
• Diesel cracks are steady this week and gasoline edging higher as weak demand concerns are balanced against tighter supplies from refinery outages this month and low inventories. API data last night showed a further decline in crude and gasoline stocks ahead of the update EIA data later today.
  • US gasoline crack up 0.1$/bbl at 34.87$/bbl
  • US ULSD crack down -0.4$/bbl at 32.07$/bbl