Crude Steady After Fall on Demand Concerns

Crude prices are ticking higher this morning after falling nearly 7$/bbl on Friday to a low of 111.84$/bbl. Concerns for higher interest rates on economies and the impact of global oil demand pushed crude down through technical support to levels last seen in mid to late May.

• Brent AUG 22 up 0.4% at 113.52$/bbl
• WTI AUG 22 up 0.4% at 108.45$/bbl
• Gasoil JUL 22 up 0.1% at 1295.75$/mt
• WTI-Brent down -0.43$/bbl at -5.07$/bbl
• The collapse in crude prices was originally followed by refined products but the crack spreads later recovered. With such tight supply and limited refining capacity, gasoline and diesel markets have stayed strong. US Energy Secretary Jennifer Granholm warned drivers of a sustained period of high pump prices and a “continued upward pull on demand”.
• US 321 crack down -0.4$/bbl at 58.13$/bbl
• US gasoline crack down -0.6$/bbl at 50.07$/bbl
• US ULSD crack up 0.1$/bbl at 74.23$/bbl
• There remains limited spare capacity with global oil supply with OPEC+ and US not yet able to increase production to cover for possible further disruption to Russian oil flows. Output from Russia appears to a have maintained stronger than originally expected despite moves from Europe away from the supply. Asia, in particular China and India, have so far managed to fill much of the gap of missing European demand for Russian crude.
• The tight supply is keeping the forward curve in steep backwardation although time spreads did follow the flat prices falling on Friday.
• Brent AUG 22-SEP 22 up 0.16$/bbl at 2.89$/bbl
• Brent DEC 22-DEC 23 down -0.08$/bbl at 11.84$/bbl