Volatile Crude Steadies After Weekly Decline

Crude is holding steady this morning after continuing the decline yesterday despite the volatility caused by an outage of the Keystone pipeline.

• Brent FEB 23 up 0.6% at 76.64$/bbl
• WTI JAN 23 up 0.7% at 71.93$/bbl
• Gasoil DEC 22 up 1.6% at 818.25$/mt
• WTI-Brent down -0.01$/bbl at -4.59$/bbl
• The market remains weak with recession fears and weaker oil demand weighing on prices and with possible Russian crude oil supply disruption and Chinese demand recovery providing upside risks.
• A leak in the Keystone pipeline caused a short spike in WTI prices with any prolonged outage likely to impact US crude inventories. The WTI-Brent spread, and prompt time spreads all reduced in reaction to the spill, but traders estimate that one segment of the pipeline, north of the spill, could restart soon.
• The impact of Russian sanctions on export flows is still unclear with Oman yesterday expressing unease over capping oil prices. Turkey continues to check insurance papers of vessels before allowing them to pass the Bosphorus strait causing a blockage of tankers waiting.
  • WTI JAN 23-FEB 23 unchanged at -0.12$/bbl
  • Brent FEB 23-MAR 23 up 0.06$/bbl at -0.38$/bbl
  • Brent JUN 23-DEC 23 up 0.11$/bbl at 1.21$/bbl
• Brent time spreads followed the weakness in crude yesterday with the front in contango until May 2023 but WTI spreads were supported by the US pipeline leak with the prompt ending the day closer towards parity.
• Weaker oil product demand has also been weighing on diesel and gasoline crack spreads with the EIA data showing falling US demand, but diesel yesterday saw some support late in the day.
  • US gasoline crack up 0.4$/bbl at 15$/bbl
  • US ULSD crack down -0.3$/bbl at 48.45$/bbl