Supply Risks Balanced Against Economic Concerns

Crude edging higher today as supply concerns are balanced against future central banking tightening impacting demand.

• The end of last week saw crude prices falling with economic concerns in focus but reports over the weekend that Iran nuclear discussion could drag on is adding to support today. Iran is not expected to respond to the latest US reply until at least Sep 2.
  • Brent OCT 22 up 0.3% at 101.34$/bbl
  • WTI OCT 22 up 0.6% at 93.59$/bbl
  • Gasoil SEP 22 down -1.6% at 1175$/mt
  • WTI-Brent up 0.15$/bbl at -7.65$/bbl
• New political unrest in Libya is also adding to supply concerns with clashes between militias in the capital. Libya has recently restored production back over 1.2mbpd after previous political protests reduced output to around 0.5mbpd by July 2022.
  • Brent OCT 22-NOV 22 down -0.23$/bbl at 1.75$/bbl,
  • Brent NOV 22-DEC 22 up 0.04$/bbl at 1.7$/bbl
  • Brent DEC 22-DEC 23 up 0.19$/bbl at 10.61$/bbl
• Time spreads have rallied over the last week largely driven by support from OPEC members such as UAE to Saudi comments from early last week regarding the possibility of production cuts at their next meeting.
  • US gasoline crack down -0.7$/bbl at 18.59$/bbl
  • US ULSD crack down -1.8$/bbl at 70.72$/bbl
• Oil product margins are drifting lower today but diesel spreads remain strong due to tight supply, low stocks and resilient demand. Gasoline spreads recovered later last week after plunging on future demand concerns.