A Little Above One Week Lows

WTI and Brent are ~$0.30 softer apiece, having struggled to rise above neutral levels amidst lingering worry re: global slowdowns, exacerbated by soft regional PMI prints.

• To elaborate, PMIs from China and South Korea printed within contractionary territory, while final Australian m’fing PMI was revised lower (53.8 from 54.5).
• Looking to Wednesday’s price action, both benchmarks closed >$2 lower each, pressured by a well-documented rise in worry surrounding hawkish Fed/ECB policy.
• Crude remained weak even after EIA inventory data showed crude stockpiles declining by significantly more than expected (and falling for a third straight week), with drawdowns observed in gasoline and hub stocks. Meanwhile, distillate inventories saw a surprise, marginal build.
• Elsewhere, reports have pointed to OPEC+ experts halving earlier forecasts of a global crude supply surplus in ‘22, mainly on persistent underproduction from members, with projections for ‘23 forecasting a 300K bpd deficit (down from a 900K bpd surplus prior). OPEC+ next meets on Sep 5.
• Iran continues to review the U.S. reply to the EU’s “final draft” re: a U.S.-Iran nuclear deal (having previously assured a reply by Sep 2), with the Iranian FM on Wed repeating a request for “stronger guarantees” from the U.S. re: not abandoning the deal.
• Looking ahead, G7 finance ministers will meet to discuss a possible price cap on Russian oil on Friday.