Russian Political Uncertainty Stokes Crude Higher

Crude markets are trading around their highest level for the week with underlying support from political instability concerns in Russia and its potential impact on crude exports. Sell side views said a risk premium was being priced into market views but at present the impact of the Russian situation was limited.

• Brent AUG 23 up 0.9% at 74.86$/bbl
• WTI AUG 23 up 1.1% at 70.1$/bbl
• Gasoil JUL 23 up 1.8% at 719.5$/mt
• WTI-Brent up 0.01$/bbl at -4.76$/bbl
• From the supply side, a further 1mn bpd Saudi production cut is set to take place from next month to help limit supply. The market has strong conviction Saudi will meet this commitment. Vortexa figures place global floating crude volumes at their highest since September 2020, helped by over 20mn bbls of Saudi crude floating off Egypt, but said crude in transit was slipping.
• Upside potential in the markets has been capped by worries of further interest rate rises coming out of the US and signs of weakness from China’s economic recovery.
• Brent AUG 23-SEP 23 down -0.01$/bbl at -0.18$/bbl
• Brent DEC 23-DEC 24 up 0.12$/bbl at 2.84$/bbl
• Gasoil time spreads are stable this week holding above the low from Friday but down from the peaks seen earlier in June driven by refinery outages and low inventories. Diesel cracks are edging up from the small dip late last week. The risk that further civil unrest in Russia could impact future oil and gas production and exports is adding upside support to energy markets. US gasoline spreads are up slightly but remain well shy of last week’s rally on the Bayway outage.
• US gasoline crack down -0.2$/bbl at 33.73$/bbl
• US ULSD crack up 0.3$/bbl at 32.52$/bbl