Steadies After Sharp Overnight Drop

Oil is modestly higher from earlier lows. Brent is just $100/bbl (versus earlier low of $98.30), while WTI is back close to $96/bbl from sub $94/bbl at the start of the session. This comes after yesterday's ~7% drop. Risk appetite is a little firmer through the Asian region today. Equities are higher, although so in tech sensitive markets. US futures are modestly higher. Other commodities have also firmed a touch.

• Demand concerns were at the forefront of the overnight fall in oil, as recession fears continue to play out in the major economies. Also, the American Petroleum Institute reported that US crude stockpiles rose by 4.76mn barrels last week. The Energy Information Administration (EIA) will report more data tonight in the US.
• The EIA also cut its gasoline demand estimate for July through to October by -2.2% versus the June forecast. This follows weaker demand conditions in the US during the summer driving season, relative to seasonal norms.
• Elsewhere, Libya has lifted force majeure at two ports according to a Bloomberg report. Ecuador has also officially lifted force majeure on oil exports, although this was seen as a formality following an earlier agreement, which ended domestic protests at the end of June.
• More broadly, OPEC's first 2023 outlook suggests little relief in terms of the supply/demand balance. The group expects demand to exceed supply by 1mn barrels per day next year.
• Finally, note US President Biden's trip to the Middle East kicks off today. He is expected to be in Saudi Arabia on Friday.