Crude oil prices remained largely steady, with ICE Brent closing nearly 0.5% lower yesterday as initial optimism over US-China trade talks faded, according to ING commodity analysts Ewa Manthey and Warren Patterson. The market also continues to weigh the impact of US sanctions on Russian oil exports, particularly affecting Rosneft and Lukoil. Overall, a comfortable supply outlook continues to cap price gains.
Middle distillates, however, are showing resilience. The ICE gasOil crack surged above $31/bbl, up from around $23/bbl earlier this month, while the Nov/Dec timespread jumped to nearly $20/t backwardation, before giving back some early morning gains.
Sanctions on Russia threaten roughly 1 million barrels per day of diesel exports, raising the risk of tighter supply. Indian refiners may also cut run rates if they halt Russian imports, further reducing middle distillate exports. Additionally, Ukraine has announced plans to scale up attacks on Russian refineries, adding to potential supply pressures. Analysts note that tightness in the middle distillate market has persisted for months and these developments are unlikely to alleviate it.