Lower As Shanghai Lockdown, Russia-Ukraine Talks In Focus

WTI is -$0.90 and Brent is -$1.20 at typing, operating a touch above Monday’s one-week lows as demand worry re: the two-stage lockdown of the Chinese city of Shanghai remains evident.

• To elaborate, Shanghai entered a phased lockdown on Monday despite earlier assurances to the contrary from city officials, with lingering worry evident re: other Chinese cities adopting similar pandemic control measures. BBG estimates have pointed to >60mn people in China either currently being under lockdown, or “facing one imminently”.
• Events surrounding the Russia-Ukraine conflict have applied further pressure, with hopes re: a diplomatic resolution seemingly rising ahead of scheduled ceasefire talks in Turkey later on Tuesday, raising expectations for a rapprochement between Russian crude exporters and international buyers.
• Elsewhere, RTRS source reports suggest that OPEC+ will stick to a 432K bpd target output increase at their policy meeting on Thursday, a slight increase (previous increases were set at 400k bpd) based on “internal recalculations” as opposed to consideration for ongoing tightness in global crude supplies. A note that the group has continued to miss its cumulative output targets, with IEA data showing a 1.1mn bpd shortfall in Feb.