Diesel Market Higher with Ongoing French Refinery Strikes

Front month crude has rebounded slightly higher this morning on the back of a slightly weaker US dollar. Oil prices fell last week on concerns for global economic growth and fears a recession could lead to lower oil demand growth. The recovery in Chinese demand remains uncertain with ongoing covid restrictions and is limiting any market upside. Yesterday China indicated no change to their Covid Zero policy.

• Brent DEC 22 up 1% at 92.56$/bbl
• WTI NOV 22 up 1% at 86.44$/bbl
• Gasoil NOV 22 up 2.2% at 1110$/mt
• WTI-Brent up 0.07$/bbl at -7.09$/bbl
• Crude time spreads remain strong with tight global supplies due to the recent OPEC+ cuts, OPEC member underproduction, uncertainty over Russian supplies due to the upcoming sanctions and recently downgraded US production estimates.
  • Brent DEC 22-JAN 23 up 0.03$/bbl at 1.51$/bbl
  • Brent DEC 22-DEC 23 up 0.31$/bbl at 12.13$/bbl
• French refinery strikes are ongoing at TotalEnergies sites despite an end to the industrial action at the ExxonMobil sites. Full operation is expected to return at the two Exxon refineries within two to three weeks. Diesel markets remain tight with the Gasoil prompt spread back near the highs from last week at 72.75$/mt. Concerns for future supplies from Russia and strong demand as the heating season approaches is helping drive crack spreads higher.
  • US 321 crack up 0.5$/bbl at 44.5$/bbl
  • US gasoline crack down -0.3$/bbl at 24.64$/bbl
  • US ULSD crack up 1.7$/bbl at 83.85$/bbl