Narrow Asia Trade After Tuesday’s Pullback

WTI is unchanged and Brent is ~-$0.15 at typing, with the Ukraine situation remaining front and centre. Note that the market has looked through the latest Japanese announcement re: a release from the country’s strategic stockpiles.

• To recap, the benchmarks shed over $3.00 on Tuesday following an easing in Russia-Ukraine tensions, with crude’s direction of travel facilitated by the Russian government announcing partial troop pullbacks from the Ukrainian border.
• Still, Ukrainian and U.S. officials have reiterated the need to verify the Russian claims, while NATO Secretary General Jens Stoltenberg flagged that NATO hasn’t “seen any sign of de-escalation on the ground,” yet. The caution from the West allowed crude futures to pull back from worst levels of the day on Tuesday, before tight ranges were observed during Asia-Pac dealing.
• Ultimately, hope remains when it comes to a peaceful resolution re: the matter, with German Chancellor Scholz noting that “the diplomatic possibilities are far from being exhausted” following a meeting with Russian President Putin.
• Elsewhere, participants are likely keeping an eye on the progress of indirect Iran-U.S. talks in Vienna, with no notable changes observed since EU High Rep. Josep Borrell tweeted that an agreement was “in sight” on Monday.
• Tuesday’s API inventory estimates reportedly revealed declines in U.S. crude, gasoline, and distillate stockpiles (although the drawdowns in headline crude and distillate stocks apparently undershot analyst expectations). U.S. EIA inventory data is due later today (1530GMT), with the median estimates from the Platts survey calling for declines in all three of the aforementioned inventory measures as well.
• On the technical front, WTI and Brent trade comfortably above key short-term support at $88.41 (Feb 9 low) and $89.93 (Feb 8 low) respectively. Recent pullbacks remain relatively shallow, and resistance on the upside is seen at the Feb 14 highs of $95.82 (WTI) and $96.78 (Brent).