Uncertain Oil Market Edges Lower After Recent Recovery

Crude is drifting back down after seeing a recovery up from around 71.5$/bbl to 77.3$/bbl on easing economic risk sentiment. Uncertainty surrounds both supply and demand with US recessionary risks balanced with a potential recovery in China on the demand side and OPEC cuts weighed against getter than expected Russian output on the supply side.

• Brent JUL 23 down -0.6% at 76.53$/bbl
• WTI JUN 23 down -0.6% at 72.71$/bbl
• Gasoil MAY 23 down -0.6% at 686.25$/mt
• WTI-Brent unchanged at -3.91$/bbl
• The recovery in China is uncertain as a fall of 18.9% in crude import volumes in April due to seasonal maintenance at refineries is adding to weaker manufacturing data released last week. Oil product exports fell to the lowest since Jul 22 with priority given to domestic supply.
• Short term supply is restricted by OPEC production cuts, the halt to Kurdish output via Turkey and wildfires in Canada have halted at least 234kbpd of oil and gas production.
  • Brent JUL 23-AUG 23 unchanged at 0.2$/bbl
  • Brent DEC 23-DEC 24 down -0.13$/bbl at 3.07$/bbl
• Crude time spreads are following the futures moves with Dec23-Dec24 edging lower after regaining much of the ground lost last week and up from a low of 1.61$/bbl. Spreads remain much lower than levels seen shortly after the OPEC production cut announcement at the start of April.
• Refining margins edged higher yesterday with easing demand risks supporting diesel crack spreads. Margins are still low with weak US manufacturing and freight activity and disappointing gasoline demand ahead of an expected boost from the US driving season.
  • US 321 crack up 0.2$/bbl at 28.93$/bbl
  • US gasoline crack up 0.3$/bbl at 30.17$/bbl
  • US ULSD crack up 0.1$/bbl at 26.47$/bbl