Falters On Cross Asset Headwinds

Brent crude dipped as far as $84.50/bbl in early trade, but we have stabilized somewhat, now back above $85/bbl. We are still off by 1.3% for the session so far. WTI is around $77.50/bbl, down by the same amount since the open. Fresh risk aversion in the equity space, along with cyclical highs in USD FX indices, has weighed.

• We haven't unwound all of oils gains from Tuesday's session. Support came from reports that Russia will propose a 1mln barrel output cut at the next OPEC+ meeting according to Reuters. There was also spill over from higher EU gas prices, which came after leaks were reported at Nordstream pipelines.
• In the US, API reported a +4mln barrel increase in crude inventories, although gasoline stocks fell by just over 1mln. Note we get the EIA weekly report this evening. Around 11% of US Crude production (190k barrels) is off line as Hurricane Ian bares down on the Gulf of Mexico region.
• Finally, some China oil refiners sounded more optimistic on the Q4 outlook for the China economy at the final day of the Asia Pacific Petroleum Conference in Singapore (see this Bloomberg link for more details).