Crude Steady as Tight Supplies Balance With Weak Demand

Crude holding steady with tight supplies balanced against weak demand concerns. The OPEC production cut starting in May, disrupted Iraqi Kurdistan oil flows, lower Russian exports, and falling Cushing inventories are all supporting prices. Upside moves are limited by ongoing concern for economic growth and global demand and with uncertainty over the rate of recovery in China.

• Brent JUN 23 down -0.1% at 86.22$/bbl
• WTI MAY 23 down -0.1% at 82.42$/bbl
• Gasoil MAY 23 down -0.2% at 770.25$/mt
• WTI-Brent up 0.02$/bbl at -3.88$/bbl
• On Friday the IEA raised its 2023 oil supply deficit to 800kbpd with oil supply down by 400kbpd by end 2023 on OPEC+ supply cuts. IEA highlighted the risks to summer oil demand with 2023 growth mostly driven by stronger Chinese consumption.
• Tighter supplies are reflected in the strong curve backwardation with time spreads just below the highest since November seen last week. The declining stocks at Cushing have helped bring the WTI-Brent spread up from around -6.5$/bbl at the start of March to -3.9$/bbl.
  • Brent JUN 23-JUL 23 down -0.01$/bbl at 0.43$/bbl
  • Brent DEC 23-DEC 24 unchanged at 5.52$/bbl
• The weak demand is combining with strong Russian oil product output and refiners returning from maintenance to weigh on the diesel crack spreads. The US spreads has fallen from a high of 47.4$/bbl on 20 Mar to the lowest since Feb 2022 at around 28.5$/bbl today.
  • US gasoline crack down -0.2$/bbl at 36.17$/bbl
  • US ULSD crack down 0$/bbl at 28.51$/bbl