Economic Concerns Push Crude Lower Despite Russia Supply Uncertainty

Crude drifts lower with economic headwinds and oil demand growth concerns in focus with an easing to the short term potential supply disruptions. There is no indication that the missile strike on Poland was not an intentional attack and Druzhba pipeline has restart following the damage to the power supply.

• Brent JAN 23 down -0.6% at 92.28$/bbl
• WTI DEC 22 down -0.9% at 84.8$/bbl
• Gasoil DEC 22 down -0.7% at 984.5$/mt
• WTI-Brent down -0.07$/bbl at -8.02$/bbl
• Increasing covid case numbers in China are adding to the downward pressure with concerns for demand from the country despite recent policy changes aimed to try to boost the economy.
• Crude forward curve backwardation has softened over the last week, but spreads are holding steady so far this morning. A tight physical market supports the spreads with uncertainty over the impact of upcoming sanctions on Russian supplies and the ability to reroute flows away from Europe.
  • Brent JAN 23-FEB 23 unchanged at 1.21$/bbl
  • Brent JUN 23-DEC 23 down -0.09$/bbl at 4.17$/bbl
• EIA data yesterday showed a larger than expected draw in crude stocks but builds in gasoline and diesel. The volatile crack spreads edged slightly higher following the data with low stocks, despite the build, and strong exports supporting the US spreads despite weaker implied demand data.
  • US gasoline crack up 0.2$/bbl at 19.96$/bbl
  • US ULSD crack down -1$/bbl at 65.93$/bbl