Crude Continues Falling On Demand Concerns

Oil prices fell sharply on Wednesday even though the USD index was 0.4% lower and US crude inventories fell sharply. WTI fell 3.7% to $74.30/bbl and Brent 3.8% to $77.69 as global growth concerns persisted in the face of ongoing US banking troubles.

• EIA data showed a larger-than-expected 5.0mn barrel drawdown in US crude inventories. Gasoline stocks fell 2.4mn, suggesting that demand may be rising. Distillate was down 0.577mn.
• Brent broke though the $80 level and reached an intraday low of $77.46/bbl after a high of $81.47 earlier in trading. WTI breached $75 to reach a low of $74.06 following a high of $77.93. WTI technicals remain bearish as it broke through the March 31 high of 75.83.
• The market is becoming less convinced that OPEC+ can implement its 1.1mbd output cut after recent shipping data indicated that Russian oil exports remained strong. In addition, the Kyiv School of Economics is suggesting that the G7 price cap on Russian oil is being widely flouted (ANZ).