Crude Testing Recent Range Highs After China PMI Data

Brent crude is edging higher to test the recent range highs at 84.19$/bbl from 20 Feb on the back of an increase in China’s manufacturing activity. The increase in PMI data is the latest sign for a potential pick up in oil demand in China this year.

• Brent MAY 23 up 0.7% at 84.04$/bbl
• WTI APR 23 up 0.7% at 77.6$/bbl
• Gasoil MAR 23 up 0.3% at 835.75$/mt
• WTI-Brent up 0.73$/bbl at -6.31$/bbl
• Prices are also supported by the expected cut to Russian oil production in March despite surprisingly robust Russian output so far following the sanctions in Dec and Feb. Concern for the global economy and another build in the API US inventory data late yesterday of 6.2mbbls are limiting the upside moves.
  • Brent MAY 23-JUN 23 unchanged at 0.62$/bbl
  • Brent JUN 23-DEC 23 up 0.04$/bbl at 2.92$/bbl
• Crude time spreads are following the strength in the futures with the prompt spread the highest since November. The longer dated spreads are towards the higher end of the range seen so far this year.
  • US gasoline crack up 0.3$/bbl at 34.37$/bbl
  • US ULSD crack up 1$/bbl at 41.6$/bbl
• Diesel and gasoline margins found support in late Feb following the decline from mid Jan. Tighter supplies due to the US and Asia refinery maintenance seasons and potential for future disruption to Russian supply following the oil product sanctions early last month are providing support. Higher transportation costs with redirected oil flows spending much longer at sea adds to the pressure to offset the weak near term demand and recent recovery in inventory levels.