Crude Steady with Weak Demand Growth Offsetting Russian Supply Concerns

Crude holding steady within the recent trading range with recession fears, China’s virus restrictions and a build in API crude stocks weighing on prices but with physical supply concerns adding support.

• Brent JAN 23 down 0% at 95.34$/bbl
• WTI DEC 22 down -0.2% at 88.75$/bbl
• Gasoil NOV 22 down -2.3% at 1043$/mt
• WTI-Brent down -0.1$/bbl at -7.47$/bbl
• Concerns for future Russian output following the EU sanctions and G7 price cap next month, OPEC underproduction and lack of spare capacity from US production are all supportive of time spreads. EIA STEO yesterday showed a lower forecast for US crude output in 2023 of 12.31mbpd. Spreads are easing back slightly but remain near range highs since June.
  • Brent JAN 23-FEB 23 up 0.03$/bbl at 1.41$/bbl
  • Brent JUN 23-DEC 23 down -0.01$/bbl at 4.43$/bbl
  • Brent DEC 23-DEC 24 down -0.03$/bbl at 5.84$/bbl
• Diesel and gasoline crack spreads are holding steady with tight supplies and low stocks offset against the impact of high prices and an economic recession on oil demand growth. API data last night showed a draw is distillates and build in gasoline. Refiners are prioritising diesel output but struggling to keep up with demand and not able to replenish low stock levels. Gasoline stocks are slightly healthier but supplies remain very tight on US East coast.
  • US gasoline crack up 0.2$/bbl at 21.99$/bbl
  • US ULSD crack down -0.3$/bbl at 69.76$/bbl