Pause in Dollar Rally Allows Crude to Tick Upwards

Crude ticks higher after reaching the lowest since January yesterday. The overriding factor driving crude is still the concerns for weaker demand growth and recession fears however a pause in the USD rally has allowed crude to recover a little ground.

• Brent NOV 22 up 1.4% at 85.21$/bbl
• WTI NOV 22 up 1.5% at 77.87$/bbl
• Gasoil OCT 22 up 0.4% at 937.75$/mt
• WTI-Brent down -0.01$/bbl at -7.36$/bbl
• Upside risks are maintaining support for time spreads with the prompt spreads rallying yesterday. Backwardation is supported by limited spare capacity and supply disruptions risks combined with the possibility of a reaction from OPEC to lower demand and falling prices. The EU ban on Russian seaborne crude is a risk to global supplies with EU nations importing half pre-invasion volumes. It remains unclear if the further reduction in flows to Europe before the implementation of the ban will all find buyers in the East.
  • Brent NOV 22-DEC 22 down -0.03$/bbl at 1.17$/bbl
  • Brent DEC 22-DEC 23 up 0.39$/bbl at 9$/bbl
• Iranian oil exports have been falling in recent months with reports of volumes falling from 1mbpd to 750kbpd due to competition from discounted Russian barrels.
• Diesel margins are following the moves in crude markets, but gasoline cracks have found more recent support. The gasoline cracks rallied nearly 2$/bbl yesterday and are stronger again this morning. Low stocks and limited supplies are supporting refining margins.
  • US 321 crack up 0.1$/bbl at 30.45$/bbl
  • US gasoline crack up 0.4$/bbl at 19.85$/bbl
  • US ULSD crack up 0$/bbl at 51.7$/bbl