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Paring Recent Gains As Growth Worry Remains Elevated


WTI and Brent are ~$0.80 softer apiece, paring a little of their respective gains made on Friday as worry re: Fed hawkishness impacting economic growth (and the outlook for energy demand) has ticked higher, with equities across the Asia-Pac region struggling as well.

  • To recap, both benchmarks closed ~$4 firmer apiece on Friday, hitting multi-week highs on tailwinds from continued tightness in U.S. crude and gasoline inventories, as well as OPEC+ decision to cut crude output targets by 2mn bpd on Wednesday.
  • On the latter topic, WTI and Brent notched ~17% and ~11% higher weekly closes respectively, largely shrugging off the above-expectations NFPs print on Friday at the time.
  • Looking ahead, participants continue to await a U.S. response to the OPEC+ decision, although some observers have stated that U.S. efforts may centre around the “NOPEC” bill for now amidst a lack of suitable, effective alternatives.
  • Further out, some are watching for signs of a Q4 easing in China’s COVID-zero policy, with the country heading for the twice-a-decade party Congress on Oct 16.
  • Brent’s prompt spread now sits at ~$1.97, a little shy of 13-week highs recorded last Friday.

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