Range Bound In Asia; Shanghai COVID Outbreak Remains In Focus

WTI and Brent are flat to $0.20 softer apiece at writing, operating within ~$1.20 trading ranges through Asia-Pac dealing. Both benchmarks sit ~$2 off Thursday’s best levels, with worry re: developments in China’s ongoing COVID outbreak remaining in focus, adding to downward pressure on the space from a surprise build in U.S. crude inventories.

• To elaborate on the latter, U.S. EIA crude inventory data crossed on Thursday, with a relatively large, surprise build in U.S. crude stockpiles reported (8.2mn bpd). Gasoline and distillate inventories declined, while there was a minor build in Cushing hub stocks. WTI and Brent briefly hit session highs on the release before quickly falling below pre-release levels, ultimately closing ~$4 higher apiece on the day, finding support from well-documented global crude undersupply fears.
• Turning to China, fresh COVID cases have been reported in more cities/provinces in the country’s east (particularly for Shandong province, which reported 66 cases after reporting no cases last week), while Shanghai’s case count for Thursday remains relatively high (45 vs. 54 for Wed), fuelling lockdown fears (although all cases were detected “in quarantine”).
• Elsewhere, worry remains elevated re: an impending court order to halt to loadings from a Caspian Pipeline Consortium (CPC) port on the Black Sea (potential to disrupt >1mn bpd of Kazakh crude), with the CPC requesting a delay of the order over concerns of permanent damage to facilities.