Crude Ticks Higher On Tighter Supply Concerns

Crude is extending the weekly gains as signs of potential tighter supply outweigh the ongoing economic demand concerns.

• Brent OCT 22 up 0.4% at 101.67$/bbl
• WTI OCT 22 up 0.3% at 95.2$/bbl
• Gasoil SEP 22 up 2% at 1191.5$/mt
• WTI-Brent down -0.03$/bbl at -6.46$/bbl
• The possibility of a cut to OPEC+ production and reduced output from CPC terminal are both adding support to crude prices. Crude markets also rallied after EIA data yesterday showed a draw in stocks although the initial reaction had been lower due to weaker implied demand data.
• Slow progress on the revival of the Iran nuclear deal is also impacting market moves. Crude has been ticking higher after initial hope for a deal last week had pushed prices down. Iran said they are reviewing the US response to the EU draft and will reply in due course.
  • Brent OCT 22-NOV 22 unchanged at 0.88$/bbl
  • Brent DEC 22-DEC 23 up 0.18$/bbl at 10.46$/bbl
• The supply concerns have also supported time spreads with the Dec22-Dec23 spread now the highest since the start of the month.
• Diesel crack spreads continued to rally after the EIA data gave little relief to the tight supply with low stocks and refiners struggling to keep up with demand. A fall in gasoline implied demand however added to the existing concerns with spreads extending the fall since mid last week.
  • US 321 crack up 0.6$/bbl at 35.6$/bbl
  • US gasoline crack up 0.7$/bbl at 17$/bbl
  • US ULSD crack up 0.6$/bbl at 72.43$/bbl