Crude Steady After Fall on Demand Concerns

Crude is holding steady today after falling yesterday in reaction to comments from US Fed Chair Powell with the risk of more interest rate hikes weighing on demand. He suggested that the ultimate level of interest rates is likely to be higher and potentially increasing faster than previously anticipated.

• Brent MAY 23 down -0.3% at 83.07$/bbl
• WTI APR 23 down -0.5% at 77.23$/bbl
• Gasoil MAR 23 up 0.2% at 824.5$/mt
• WTI-Brent down -0.13$/bbl at -5.68$/bbl
• The move lower ended a crude rally from a low of 80.45$/bbl on 22 Feb up to the peak of 86.9$/bbl driven by optimism for China demand and supply risk due to the Russia production cut in March. Over the weekend China set a more modest growth target for 2023 but still enough to provide an upside risk to oil demand and prices.
  • Brent MAY 23-JUN 23 down -0.01$/bbl at 0.48$/bbl
  • Brent JUN 23-DEC 23 down -0.01$/bbl at 2.45$/bbl
• Brent crude remains in strong backwardation but spreads eased back in line with the move in the futures yesterday. Jun23-Dec23 pulled back into the middle of the 1.6$/bbl to 3.4$/bbl range from this year while the prompt spread is still near recent highs despite the move.
  • US gasoline crack down -0.1$/bbl at 35.22$/bbl
  • US ULSD crack up 0.3$/bbl at 40.23$/bbl
• Diesel crack spreads steady after falling in the last week due to weak demand, stronger than expected Russian product output and building inventories. The US diesel crack is down to around 40$/bbl from a peak of 43.8$/bbl on 2 Mar. Gasoline cracks are drifting off from the highs from earlier this week after rallying due recovering US demand, low inventory levels and a strong US refinery maintenance season ahead of the upcoming US driving season and switch to summer grade gasoline.