- Oil is on track for its second weekly loss in a row following plans for large releases from government stockpiles and a viral outbreak in China
- Backwardation remains in oil’s curve structure, but monthly spreads have collapsed as the front of the curve moves lower
- WTI’s prompt spread is now only 56c wide, down from $3/Bbl only fifteen days ago
- China’s oil demand outlook turns more bearish as its Covid-19 outbreak worsens, lockdowns are extended in Shanghai (Bloomberg)
- The lockdown measures have knocked out 1.2-1.3 MMBbl/d of Chinese transport fuel demand, according to FGE
- “The full lockdown in Shanghai and the severity of the situation there is a little unexpected,” said Mia Geng, an analyst at FGE in Singapore
- There will still be 500 MBbl/d of fuel demand at constant risk in other parts of China, even if the lockdowns in Shanghai end, she said