Crude Steady As Tighter Supplies Balance With Demand Uncertainty

Crude prices are holding steady after yesterday recovering some of the losses seen in a decline from 87.4$/bbl on 12 Apr. Uncertainty over global demand and the demand recovery in China are balanced against tighter supplies with prices holding above levels seen before the OPEC production cut announcement at the start of April.

• Brent JUN 23 up 0% at 82.77$/bbl
• WTI JUN 23 up 0.1% at 78.8$/bbl
• Gasoil MAY 23 up 0.4% at 736.75$/mt
• WTI-Brent down -0.03$/bbl at -3.97$/bbl
• Russian oil exports remain buoyant despite the target 500kbpd production cut in place since March. The OPEC production cut starting in May, ongoing disruption to Iraqi Kurdistan oil flows, and falling Cushing inventories are all providing price support.
• An increase in travel in China during the upcoming holiday period could boost short term fuel demand. Air demand during this latest holiday period will be a key indicator of the Chinese economic recovery which is supporting oil demand in 2023 as other major economies battle recessionary pressures.
  • Brent JUN 23-JUL 23 down -0.02$/bbl at 0.17$/bbl
  • Brent DEC 23-DEC 24 up 0.06$/bbl at 4.28$/bbl
• Crude backwardation also saw some support yesterday but has softened over the last couple of weeks. Time spreads yesterday reached the lowest since the start of the month. Prompt spreads are trading back near to levels seen last month.
• Weak demand, returning refinery output and crude support due to OPEC cuts is weighing on refining margins. The US 321 crack spread is down from a high of 41.9$/bbl in mid March to 29.6$/bbl.
  • US gasoline crack down 0$/bbl at 30.86$/bbl
  • US ULSD crack up 0.2$/bbl at 27.17$/bbl