Crude Steady After Weekly Fall on Softer Demand

Brent front month has fallen nearly 7$/bbl during the week on weak demand and easing short term supply pressure before the EU ban on Russian crude. Ongoing economic growth concerns amid high inflation and central bank tightening and uncertainty over Chinese oil demand provide downside pressure to crude.

• Brent JAN 23 down -0.1% at 89.68$/bbl
• WTI DEC 22 up 0.1% at 81.76$/bbl
• Gasoil DEC 22 up 0.5% at 960.5$/mt
• WTI-Brent up 0.14$/bbl at -8.11$/bbl
• Supply concerns have reduced following the easing to geopolitical tensions and with the resumption of Druzhba flows after disruption earlier this week. The easing short term supply situation is showing in the softer curve backwardation with the prompt time spread trading to the lowest since early September.
  • Brent JAN 23-FEB 23 down -0.15$/bbl at 0.81$/bbl
  • Brent JUN 23-DEC 23 down -0.06$/bbl at 3.7$/bbl
• Weak demand and economic slowdown concerns are limiting the upside of diesel spreads with lower heating oil demand due to warm weather and high retail prices. EIA showed weaker gasoline and distillate implied demand in data earlier this week. Support comes from low supplies with US distillate stocks still 15% below the five year average with ongoing strong exports as Europe moving away from Russian oil.

• US gasoline crack down -0.4$/bbl at 21.09$/bbl
• US ULSD crack down -0.1$/bbl at 66.03$/bbl