Crude Steady After Rally on Supply Concern and Demand Optimism

Crude oil is holding steady today after a rally late yesterday with support from supply concerns and optimism around future Chinese demand. Uncertainty surrounds global economic growth and oil demand growth as Fed Chair Powell yesterday said more interest rate increases will be needed.

• Brent APR 23 up 0.2% at 83.89$/bbl
• WTI MAR 23 up 0.4% at 77.47$/bbl
• Gasoil FEB 23 up 1.9% at 847.25$/mt
• WTI-Brent up 0.11$/bbl at -6.19$/bbl
• Kurdish government said crude oil flows to Ceyhan port resumed late on Tuesday after the halt to flows combined with an outage at Norway’s Johan Sverdrup Phase 1 to add to upside market pressure.
• The EIA has lowered the US crude oil production forecast for 2024 down from 12.81mbpd to 12.65mbpd according to the Short Term Energy Outlook released yesterday.
  • Brent APR 23-MAY 23 up 0.03$/bbl at 0.35$/bbl
  • Brent JUN 23-DEC 23 unchanged at 2.76$/bbl
• Time spreads followed the flat price move yesterday with a strong rally in the WTI prompt spread although the front of the curve remains in contango. Longer dated spreads regained some of the losses from the previous week but are still down from the recent peak on 27 Jan.
• Product crack spreads are still weak despite the EU product ban and refinery outages although spreads also followed the wider oil market rally yesterday. API data late yesterday showed a draw in crude stocks but builds in both gasoline and distillates.
  • US gasoline crack up 0.4$/bbl at 25.91$/bbl
  • US ULSD crack up 0.8$/bbl at 45.34$/bbl