Weaker Prices as Economic Risk Outweigh Tight Supply

The week has started on a weaker note with concerns for economic risks and returning crude supply from Libya keeping downward pressure on prices.

• WTI continues to fall quicker than Brent with the spread now as wide as -8.67$/bbl.
  • Brent SEP 22 down -0.6% at 102.58$/bbl
  • WTI SEP 22 down -0.8% at 93.91$/bbl
  • Gasoil AUG 22 down -4.3% at 1021.25$/mt
  • WTI-Brent down -0.11$/bbl at -8.67$/bbl
• Libya’s state oil operator aims to restore output to 1.2mbpd within two weeks after protests have restricted output for the last couple of months. Crude output was reported as 860kbpd at the end of last week with exports having hit a low of 323kbpd at the start of the month.
  • Brent SEP 22-OCT 22 up 0.12$/bbl at 4.94$/bbl
  • Brent DEC 22-DEC 23 down -0.34$/bbl at 8.89$/bbl
• The physical market remains tight with the WTI and Brent strongly backwardated. Most spreads are drifting lower except for the front Brent spread which has reached a record level this morning of 4.95$/bbl.
  • US gasoline crack down -0.2$/bbl at 31.85$/bbl
  • US ULSD crack down -0.5$/bbl at 47.95$/bbl
• Gasoline and diesel crack spreads are also lower after remaining relatively stable at the end of last week. Lower fuel pump consumption has pushed spreads lower over the last month but falling pump prices could help to support demand towards the ed of the summer driving season.