Crude Steady After Weekly Gain on Demand Hope

Crude is steady this morning and holding onto over 6% of weekly gains supported by optimism for oil demand. Sentiment that the US Fed could slow the pace of rate hikes is adding to the upside support.

• Brent MAR 23 down -0.2% at 83.85$/bbl
• WTI FEB 23 down -0.1% at 78.32$/bbl
• Gasoil FEB 23 down -0.2% at 918.25$/mt
• WTI-Brent up 0.08$/bbl at -5.27$/bbl
• Strong demand of West African crude could be a signal of increased demand from China with new import quotas and the expected recovery due to easing covid restrictions.
• Oil market liquidity is showing signs of recovery this year with aggregate open interest in WTI, Brent and Gasoil all picking up.
  • Brent MAR 23-APR 23 unchanged at -0.16$/bbl
  • Brent JUN 23-DEC 23 down -0.02$/bbl at 2.43$/bbl
• Demand optimism is supporting curve backwardation with spreads trading higher yesterday. The prompt spread is trading back up to -0.15$/bbl from a low of -0.32 earlier this week with a short term boost to China demand ahead of the Lunar New Year helping to offset current weak US demand figures.
• Diesel and gasoline crack spreads have edged higher this week support by the hope for a recovery in demand. Potential supply risks from the EU ban on Russian products remains supportive of product prices while inventory levels remain below normal despite a recent recovery.
  • US gasoline crack down -0.5$/bbl at 25.03$/bbl
  • US ULSD crack down -0.1$/bbl at 56.82$/bbl