Crude Steady after 15$ Fall in two Days

Crude continues to slide with Brent trading as low as 98.6$/bbl and WTI to 95.2$/bbl yesterday.

• Brent SEP 22 up 0.1% at 100.78$/bbl
• WTI AUG 22 up 0.1% at 98.6$/bbl
• Gasoil JUL 22 down -1.1% at 1071$/mt
• WTI-Brent down -0.16$/bbl at -5.71$/bbl
• Prices are near close levels this morning after falling about $15/bbl in the last two days as fears of an economic downturn drive the market. The potential for lower oil demand growth due to a recession is outweighing the tight physical market supply. Crude prices are now approaching the levels seen at the end of February before the Russian invasion of Ukraine.
• Concerns for the recovery in China are adding to the bearish pressure as a an increase in covid infections may increase the prospect of the reintroduction of restrictions and could delay the return of oil demand to pre covid levels.
• Time spreads did fall back very slightly yesterday but they are still at very high levels with little overall change in the curve backwardation at the front of the curve. Further out the curve is slowly flattening as the Dec-Dec spread trades lower flowing the moves in outright futures prices.
• Brent SEP 22-OCT 22 up 0.02$/bbl at 3.62$/bbl
• Brent DEC 22-DEC 23 up 0.21$/bbl at 9.64$/bbl
• Refined product crack spreads have continued to drift lower from peaks reached during June. The economic slowdown is combining with signs of lower demand due to high pump prices to bring spreads down. Unlike outright crude the levels remain significantly inflated with European spreads over double the end of Feb prices as inventory levels are still below below normal.
• US gasoline crack up 0.9$/bbl at 38.18$/bbl
• US ULSD crack up 0.3$/bbl at 46.14$/bbl
• Gasoline-Brent up 1$/bbl at 30.98$/bbl
• Gasoil-Brent up 1.1$/bbl at 33.56$/bbl