Oil Edges Higher on Supply Concerns But Holding Within Range

Crude is edging higher this morning supported by supply concerns and a slightly weaker US dollar. Brent is holding within the 83.5$/bbl to 86.0$/bbl range seen since the OPEC production cut announcement at the start of this month. The market is balancing economic driven demand concerns against the OPEC production cuts from next month while uncertainty remains over the China recovery this year.

• Brent JUN 23 up 0.8% at 84.89$/bbl
• WTI MAY 23 up 1% at 80.51$/bbl
• Gasoil APR 23 up 0.3% at 782.75$/mt
• WTI-Brent down -0.01$/bbl at -4.37$/bbl
• The ongoing supply disruption to pipeline oil flow from Iraq to Turkey are also supportive of prices. Around 450,000 bpd of Kurdish oil remains tied up. Turkey wants to negotiate with Iraq a settlement it’s been ordered to pay before a pipeline holding up the flows is reopened. The prolonged dispute has resulted in Kurdish oil production being hit as storage tanks reach full.
• The monthly reports from EIA, IEA and OPEC are all due this week as the market assess the potential for a tighter supply demand balance later this year.
  • Brent JUN 23-JUL 23 unchanged at 0.39$/bbl
  • Brent DEC 23-DEC 24 up 0.15$/bbl at 5.53$/bbl
• Crude time spreads are following the moves in the futures with prices slightly higher on the day on tighter supply concerns. Crude backwardation is just below the steepest since November.
• Diesel and gasoline margins are seeing a recovery back up supported by easing economic demand fears and the switch to summer grade gasoline ahead of the US driving season. Uncertainty remains over Russian oil output this year despite robust supplies since the implementation of sanctions against the country.
  • US gasoline crack up 0.4$/bbl at 38.79$/bbl
  • US ULSD crack down 0$/bbl at 32.82$/bbl