Just Off Multi-Month Lows As U.S. Inventory Data Weighs

WTI and Brent are ~$0.30 firmer apiece, with both benchmarks treading water above their respective worst levels established on Wednesday, placing them firmly back into ranges witnessed before the Russia-Ukraine war.

• To recap, WTI and Brent closed ~$3-4 lower apiece on Wednesday, seeing WTI hit five-month lows after the latest round of U.S. EIA inventory data pointed to a large, surprise build in crude stockpiles, corroborating with prior reports on API inventories. A smaller - but surprise increase in gasoline stocks was observed as well, stoking worry from some quarters re: demand destruction amidst higher energy prices, particularly as the build comes amidst the peak of seasonal demand.
• Demand-related worry surrounding the EIA data release more than offset tailwinds from the earlier OPEC+ announcement to raise collective output targets from Sep by 100K bpd, disappointing expectations for a larger increase in a move that some have said works out to “86 seconds of global demand” on a daily basis.
• Brent’s prompt spread continues to head south, printing ~$1.55 at typing (compared to peaking at ~$2.80 earlier this week), pointing to waning worry re: tightness in global crude supplies.
• Elsewhere, the Caspian Pipeline Consortium (CPC) has reported that crude supply has been significantly reduced at the Tengiz (>600K bpd capacity) and Kashagan (~400K bpd) oilfields without citing reasons nor figures at writing.