Crude Continues To Tumble In APAC Session

Oil began trading lower from the start of the European session and fell over 4% following Tuesday’s +5% decline as risk appetite deteriorated and recession fears came to the fore. WTI slumped another 4.8% on Wednesday and is down a further 1.9% during the early APAC session to $67.32/bbl after reaching a low of $63.64. Brent fell 4.5% to $71.93. The lower greenback (USD index -0.7%) and possible end to the Fed’s tightening cycle didn’t provide any support to crude.

• WTI is down 13.1% so far this week and yesterday broke through round support of $70 and the March 24 low of $67.02. This morning it breached late December 2021 lows. Brent broke through $72.34, the March 24 low, which has opened up key support at $70.10, the March 20 low.
• OPEC+’s production cut announcement hasn’t enabled them to control oil prices and this week’s dive is being watched closely by them with the Russian Deputy PM Novak saying that it’s necessary to understand why they are falling so sharply and if it is going to be temporary, according to Tass reports. Any further output cuts announced by Russia are likely to be doubted given the strong exports currently indicated by tanker-tracker data.
• Official US EIA data showed an inventory drawdown of 1.28mn barrels last week with gasoline up 1.74mn and distillate down 1.19mn. Refinery utilisation fell 0.6%. US crude imports were stable.