WTI Back Above $100 As Ruble Row Unfolds; Shanghai Cases Fall

WTI and Brent are ~$0.20 firmer at typing, operating a little below their respective best levels for the week. Both benchmarks have extended gains made on Tuesday (after closing ~$3 higher in that session), with the move higher facilitated by possible signs of easing in Shanghai’s ongoing COVID outbreak.

• To elaborate, total fresh COVID cases in Shanghai for Tuesday came in at ~13.5K, declining for a fourth consecutive day to hit three-week lows. Speculation over the easing of lockdowns in the city has also risen following observed software updates on the ubiquitous Alipay payment app allowing for the display of COVID-relevant movement permits. Participants are however keeping an eye on fresh cases in Beijing (likely over lockdown risks), with authorities reporting 34 cases for Tuesday, a roughly similar rate to Monday’s figures.
• Elsewhere, major crude benchmarks caught a bid on Tuesday after Russia announced that natural gas supplies to Poland and Bulgaria would be cut after they had refused to make payment in rubles. The EU also continues to make well-documented progress towards a ban on Russian crude,
• Looking to the U.S., the latest round of API inventory reports crossed late on Tuesday, pointing to a larger than expected build in crude stockpiles that largely negated last week’s decline. An increase was reported in distillate and Cushing hub stocks as well, while there was a drawdown in gasoline inventories.
• Up next, U.S. DOE inventory data crosses at GMT1430 on Wednesday, with WSJ median estimates calling for a build in crude and gasoline stocks, with a drawdown in distillate stockpiles.