Crude Steady as Weak Demand Weighs on Oil Markets

Crude holding relatively unchanged today after falling nearly 6$/bbl on the week as concern for weak demand has taken over from supply disruptions and OPEC production cuts.

• Brent JUN 23 down -0.3% at 80.85$/bbl
• WTI JUN 23 down -0.3% at 77.11$/bbl
• Gasoil MAY 23 up 0.1% at 719.75$/mt
• WTI-Brent down -0.07$/bbl at -3.74$/bbl
• Many analysts are still expecting higher prices with a supply deficit in the second half of this year with a potential recovery in demand in China. The OPEC production cuts totally 1.16mbpd are due to start in May. The target 500kbpd cut in Russian production is already in place although compliance with the target is still uncertain with exports remaining strong.
• Diesel has continued the bearish trend in place since late Jan while gasoline has also pulled back this week with signs of weakness and slowdown in the US economy. Concern for the impact of another potential Fed rate hike is weighing on all oil markets.
  • US gasoline crack down -1.2$/bbl at 30.41$/bbl
  • US ULSD crack down -0.9$/bbl at 26.72$/bbl
• Curve backwardation continues to soften with most crude time spreads the lowest this month and Gasoil spreads also near long term lows. Crude spreads however remain above the levels seen before the voluntary OPEC production cut announcement on 1 April.

• A seven week draw in Cushing stocks is helping support the WTI-Brent spread up at -3.73$/bbl today compared to -4.3$/bbl at the start of the month.
  • Brent JUN 23-JUL 23 down -0.02$/bbl at 0.27$/bbl
  • Brent DEC 23-DEC 24 up 0.02$/bbl at 4.14$/bbl