Fresh One-Week Lows In Asia As Soft Economic Data Abounds

WTI and Brent are ~$1.50 worse off apiece at typing, extending Monday’s losses and operating a little above their respective one-week lows made earlier in the session.

• To recap, both benchmarks notched ~$6 declines on Monday, tracking broader selloffs in equities globally with worry evident re: China’s ongoing pandemic control measures and global stagflation risks, while a fresh 20-year high in the USD (DXY) applied some pressure to the space.
• On stagflation worry, a NY Fed survey released on Monday pointed to rising long-term inflation expectations amongst consumers, suggesting expectations for slower growth as well. Looking at Europe, a German economist was cited as saying that an end to Russian gas imports would see a “deep recession” in Europe’s biggest economy and trigger half a million job losses “by most calculations”, coming as Russia has already cut gas supplies off EU members Poland and Bulgaria.
• Turning to China, COVID cases in China have continued their steady descent, although authorities have continued to double down on the country’s zero-COVID policy, elevating uncertainty re: lockdowns across the country. Recent economic data releases have shown Chinese exports slowing to their weakest pace in nearly two years, with refinery throughput estimated to have fallen ~6%, the sharpest such decline since early 2020.
• Elsewhere, a Platts survey has pointed to collective production in OPEC+ for April falling ~2.59mn bpd short of the current production quota, led lower by struggling Russian production amidst well-documented difficulties in the Russian crude industry.