April 21, 2022 03:44 GMT
WTI is ~+$1.00 and Brent is ~+$1.10, operating around the upper end of their respective ranges for Wednesday at typing.
- Both benchmarks closed virtually unchanged on Wednesday, with familiar concerns re: demand destruction (arising from lowered global growth forecasts and China’s ongoing COVID outbreak) countering well-documented worry over tight global crude supplies.
- Looking to China, a straightforward recovery in industrial activity seems unlikely despite a phased re-opening of factories in affected regions, with initial reports pointing to difficulties in resuming production owing to supply chain disruptions, with some factories re-entering lockdowns as well (e.g. Taiwan’s Unimicron Technology suspended production from today to Apr 27, just one day after emerging from their previous suspension on Apr 19).
- Elsewhere, the latest round of U.S. EIA data crossed on Wednesday, showing a large, surprise drawdown in crude inventories (~8mn bbl drawdown vs WSJ median 2.2mn build) that was attributed to a surge in U.S. oil exports to over two-year highs, coming as a larger than expected drawdown in distillate stocks was observed as well. A decline in gasoline stockpiles came in largely within expectations, while Cushing hub inventories edged downwards.
- The drawdown in crude and distillate inventories largely corroborated reports of Tuesday’s API inventory estimates of the same, while differing on gasoline and Cushing hub stockpile figures.