Higher In Asia; IEA Revises Crude Shortfall Projections For ‘22

WTI is ~+$1.20 and Brent is ~+$1.40, extending a move higher from their respective best levels on Thursday, and operating a little off session highs at typing. Both benchmarks are nonetheless on track for their first weekly loss in three, with worry re: reduced economic growth and energy demand remaining front and centre.

• EU lawmakers may delay potential Russian energy sanctions over well-documented Hungarian resistance, with a previously flagged video call between parties remaining unscheduled. Looking ahead, the next round of discussions between EU leaders re: the matter will likely happen in end-May.
• Turning to China, Shanghai reported six COVID cases “in the community” for Thursday, (increase from Wednesday’s two cases), keeping in mind that Chinese officials have placed the lifting of lockdowns to be conditional on three days of zero community spread. Elsewhere, city authorities in Beijing have denied rumours of an impending city-wide lockdown with some media reports of stockpiling behaviour doing the rounds on Thursday, keeping in mind that Shanghai’s current lockdown was similarly preceded by authorities declaring two days prior that no such measures would be taken. Beijing recorded 50 new cases on Thursday, against 46 on Wednesday.
• Elsewhere, the International Energy Agency’s (IEA) monthly Oil Market Report crossed on Thursday. The group revised supply shortfall projections for ‘22 downwards, pointing to a fall in Chinese energy demand and demand destruction from higher oil prices mixing with output increases elsewhere, suggesting that the impact on global supplies from sanctions on Russian energy may be less severe than initially feared.