Crude Steady with High Uncertainty over Market Balance

Crude holding steady today after Brent pulled back from a peak at 98.6$/bbl at the end of last week. Global growth concerns have taken over focus from the supply cut from OPEC which pushed prices higher last week.

• Brent DEC 22 up 0.5% at 94.73$/bbl
• WTI NOV 22 up 0.2% at 89.54$/bbl
• Gasoil NOV 22 up 3% at 1082$/mt
• WTI-Brent down -0.09$/bbl at -6.54$/bbl
• Upside supply driven gains have been limited by the potential for lower oil demand growth due central bank tightening, a stronger dollar and worries for a US recession with a downgrade to global growth forecasts by IMF. Ongoing covid restrictions in China are also weighing on prices.
  • Brent DEC 22-JAN 23 up 0.06$/bbl at 1.86$/bbl
  • Brent DEC 22-DEC 23 up 0.35$/bbl at 13.12$/bbl
• Crude time spreads have not followed the pull back with both the prompt spread and the longer dated Dec22-Dec23 spread relatively unchanged on the week. Global supplies remain tight with OPEC underproduction and target cuts, uncertainty over future Russian exports and little sign of any significant production increase from US.
  • US 321 crack up 0.6$/bbl at 38.88$/bbl
  • US gasoline crack down -0.2$/bbl at 20.77$/bbl
  • US ULSD crack up 0.3$/bbl at 74.9$/bbl
• Diesel cracks spreads fell back slightly yesterday on the global growth concerns but both diesel gasoline remain supported by tight supplies from high refinery outages and concerns for the impact of the EU ban on Russian products.