Crude Strength Supported by China Demand and Russian Supply Uncertainty

Crude is holding onto overnight gains with upside pressure from a potential Chinese demand recovery and Russian output concerns offsetting near term weak product demand and recession fears. Brent has rallied nearly 10$/bbl from a low early this year but global economic concerns are limiting the upside moves as the Fed are expected to raise rates again next week.

• Brent MAR 23 up 0.3% at 87.69$/bbl
• WTI MAR 23 up 0.3% at 81.27$/bbl
• Gasoil FEB 23 up 0.4% at 969$/mt
• WTI-Brent up 0.06$/bbl at -6.4$/bbl
• The uncertainty over the impact of the upcoming EU ban on Russian products on oil supplies has driven the prompt Brent spread back into positive territory. The Brent spread increased yesterday to the highest since 3 Jan. Longer dated spreads remain in strong backwardation with levels near to the highest since mid November.
  • Brent MAR 23-APR 23 down -0.04$/bbl at 0.15$/bbl
  • Brent JUN 23-DEC 23 down -0.05$/bbl at 3.18$/bbl
• Weak near term demand is limiting refined product upside despite tight supply concerns. EIA data on Wednesday showed weak gasoline and diesel implied demand still at the bottom of the five year range. High US refinery outages following winter disruption in December, the upcoming planned maintenance season and concern for Russia product supplies could all add to the tight market and support refined product prices.
  • US gasoline crack up 0.1$/bbl at 29.13$/bbl
  • US ULSD crack down 0$/bbl at 57.35$/bbl