Crude Steady with Recession Concerns Set Against China Optimism

Crude holding steady after recovering a little ground in early trading after better than expected economic data from China. Ongoing concern for global economic growth and oil demand continues to weigh on prices and is limiting any upside moves.

• Brent MAR 23 up 0% at 84.48$/bbl
• WTI FEB 23 down -0.9% at 79.11$/bbl
• Gasoil FEB 23 down -0.4% at 930.5$/mt
• WTI-Brent down -0.19$/bbl at -5.11$/bbl
• Recession concerns and high covid case numbers in China have limited near term demand but the global supply-demand balance is forecast to be tighter later this year. A recovery in Chinese demand as well as the potential for a wider economic recovery could boost oil demand this year while further disruption to Russian supply is possible following the EU ban on products from 5 Feb.
  • Brent MAR 23-APR 23 up 0.02$/bbl at -0.18$/bbl
  • Brent JUN 23-DEC 23 up 0.07$/bbl at 2.66$/bbl
• Brent crude time spreads are also relatively unchanged with most of the curve in backwardation except for the prompt spread still trading negative. The prompt crude spreads remain in contango due to weak demand suggesting ample near term supplies. Russian seaborne crude exports rose 876mbpd last week according to Bloomberg suggesting supplies are finding an outlet despite the EU ban and G7 price cap.
  • US gasoline crack down -0.1$/bbl at 26.47$/bbl
  • US ULSD crack down -0.7$/bbl at 57.72$/bbl
• Diesel and gasoline crack spreads continue to trend higher yesterday with the potential for tighter supplies following the EU ban on Russian products next month despite current weak demand data.