OIL: Crude Eases Back from Range High on Weaker Risk Sentiment

Crude front month has eased back down from near the recent range high seen yesterday driven by a general pullback in risk sentiment amid concern for high for longer US Fed rates despite slightly more positive macro data this month.

• The US Fed is still looking for more evidence of slowing inflation before easing rates, with market focus on the impact on future oil demand growth.
  • Brent JUL 24 down 0.5% at 83.27$/bbl
  • WTI JUL 24 down 0.5% at 78.87$/bbl
  • Gasoil JUN 24 down 0.8% at 759.25$/mt
  • Brent JUL 24-AUG 24 down 0.04$/bbl at 0.21$/bbl
  • Brent DEC 24-DEC 25 down 0.11$/bbl at 4.23$/bbl
• Crude has seen little impact from geopolitical risks in producing countries with no immediate impact on energy policy from the death of the Iranian President and health issue of the Saudi king.
• The crude forward curve remains in backwardation but with time spreads under downward pressure this month while awaiting the OPEC+ meeting in June. The prompt Brent spread is down to just $0.21/bbl compared to over $1.00/bbl in April.
• Managed money net long crude positions last week fell to the least bullish since January while crude options are holding onto a volatility skew in favour of the puts.
• Diesel and gasoline cracks are holding steady today amid ongoing concern for weak seasonal demand while refineries returning from maintenance are likely to boost supply and Russia has suspended its gasoline export ban.
  • US gasoline crack up 0.1$/bbl at 27.28$/bbl
  • US ULSD crack down 0.1$/bbl at 24.45$/bbl