Oil futures: Crude edges higher but heading for 6% weekly losses
Quantum Commodity Intelligence – Crude oil futures Friday were slightly higher following a bruising week that saw prices slide by around 6%, as the sluggish outlook for the US economy outweighed any concerns over tight supplies.
June ICE Brent futures were trading at $81.36/b (1730 GMT) compared to Thursday's settle of $81.10/b and last Friday's close of $86.31/b.
At the same time, Jun23 NYMEX WTI was trading $77.62/b versus Thursday's settle of $77.37/b and last Friday's close of $82.52/b. The May23 contract settled at $77.29/b on expiry.
The latest negative indicators from the US showed softer labour data, with unemployment benefit claims rising more than expected, while home sales and average selling prices weakened.
"The weakness in oil is not being driven by current oil market fundamentals but really on fears that demand is going to collapse due to the Fed that will most likely continue in its rate hiking cycle without a pause," said Phil Flynn of The Price Futures Group, adding the market was also weighed down after New York Fed president John Williams said credit conditions would likely deteriorate because of the banking crisis in March.
Sluggish refined products also weighed on crude values this week as margins came under further pressure.
Diesel
Data compiled by Quantum showed diesel markets in Asia and Europe are at their most oversupplied since the pandemic, while the forward curve is at its flattest level in nearly two years.
The May-November time spread in gasoil 10ppm swaps stood at just $0.10/b on Thursday, down from $0.60/b a week ago and from $7/b in January in a move that reflects the short-term oversupply in diesel.
In Asia, gasoline prices have been under further pressure this week and slumped to their lowest levels of the year on Thursday, with plentiful supply from China butting up against lacklustre demand.
Quantum data showed Thursday that the 92 RON Asian cargo price fell for a fifth consecutive session as it lost another $3.12/b on the day to touch a one-month low of $91.83/b, leaving the crack versus Brent at a three-month low of +$10.02/b.
Meanwhile, comments from US official Amos Hochstein that the US could begin to refill its Strategic Petroleum Reserve were largely shrugged off.
The special presidential coordinator reiterated comments that the administration is looking to restock the SPR, but only if prices are around $70b.
"I think as we get into the early fall, if prices are in the right place, we are still 100% committed to replenishing the SPR over a period of time," Hochstein said at a forum.
