Oil Higher on Tight Supplies Before Fed Rate Decision

Crude continues to increase on risks for tight global supplies with EU sanctions on Russian crude due to take effect from next month. Upside may be limited with ongoing concerns for global demand growth due to an economic slowdown and central bank tightening with the Fed rate decision due later today. Uncertainty over oil demand from China is also driving moves in the crude markets.

• Brent JAN 23 up 0.6% at 95.19$/bbl
• WTI DEC 22 up 0.8% at 89.07$/bbl
• Gasoil NOV 22 down -0.2% at 1045.5$/mt
• WTI-Brent down -0.05$/bbl at -7.3$/bbl
• The physical markets are tight because of the supply deficit with OPEC production cuts and lower Russian output. The tight supplies in the near term are maintaining curve backwardation with near term time spreads towards the top of the recent ranges. Longer dated spreads are slightly not quite as strong due to economic slowdown concerns limiting gains.
  • Brent JAN 23-FEB 23 unchanged at 1.86$/bbl
  • Brent JUN 23-DEC 23 up 0.02$/bbl at 4.18$/bbl
  • Brent DEC 23-DEC 24 up 0.06$/bbl at 5.51$/bbl
• API data last night showed a big fall in crude stocks, a further fall in gasoline and small build in distillates. Diesel crack spreads are drifting lower again today while gasoline cracks are holding onto small gains made yesterday.
  • US 321 crack down -0.3$/bbl at 34.67$/bbl
  • US gasoline crack down 0$/bbl at 20.59$/bbl
  • US ULSD crack down -0.9$/bbl at 63.11$/bbl