A Little Above Multi-Month Lows; Iranian Matters At The Fore

WTI is ~+$0.60 and Brent is ~+$0.50 at typing, edging away from their respective multi-month lows made on Tuesday.

• To recap, both benchmarks shed ~$3 apiece on Tuesday for a third consecutive lower daily close, with WTI hitting levels last witnessed in end-Jan during the session. The weakness in crude was facilitated by perceived progress in a U.S.-Iran nuclear deal, adding to pressure from wider worry re: global economic growth.
• To elaborate on the former, BBG sources have pointed to the EU describing Iran’s response to its “final draft” as “constructive”, with the Biden administration due to respond as well. The U.S. State Dept has however maintained that the Islamic Revolutionary Guard Corps will remain a designated terrorist organisation - a sticking point in past negotiations. A note that Goldman Sachs has since weighed in on the agreement as “unlikely” in the short-term (details fleshed out in earlier bullets).
• The prompt spreads for WTI and Brent have continued their descent, printing ~$0.40 and ~$0.61 respectively at typing, a little above fresh multi-month lows observed on Tuesday.
• WTI rose off worst levels on Tuesday after the latest round of API inventory estimates, with reports pointing to a significant drawdown in gasoline stocks, easing worry from some quarters re: demand destruction, while a decline in crude, distillate, and Cushing hub stockpiles was reported as well. Up next, U.S. EIA data is due later today, with BBG median estimates looking for drawdowns in crude and gasoline stockpiles.