Slightly Lower In Asia

WTI is -$0.70 and Brent is -$0.30, printing $114.30 and $121.30 respectively at writing.

• Both benchmarks have backed away from two-week highs made earlier in the session but operate near the top of Wednesday’s range, finding support as debate over possible EU sanctions on Russian energy exports has done the rounds in Asia, while disruptions to the Caspian Pipeline Consortium (CPC) pipeline has exacerbated worry re: tightness in global crude supplies.
• To elaborate on the latter, CPC officials announced that crude exports from the port of Novorossiysk were completely halted on Wednesday, flagging “abnormal storms” as the cause of “critical” damage to facilities. The closure is expected to remove up to 1.2mn bpd of crude from global markets for the duration of repair works (estimated to be ~2 months).
• Looking at possible EU measures re: Russian energy exports, U.S. national security adviser Jake Sullivan has pointed to a “practical roadmap” to increase LNG supplies to Europe, which will be unveiled on Friday, with the obvious aims of addressing concerns re: cuts in Russian gas supplies & reducing European reliance on Russian energy. Ultimately, the timeline surrounding fresh measures to curb Russian energy exports to the EU remains uncertain, with French officials casting doubt over new energy-related sanctions on Russia this week.
• Weekly EIA data released on Wednesday saw a surprise drawdown in crude stockpiles with larger-than-expected declines in gasoline and distillate inventories (against WSJ estimates), while there was a build in stocks at the Cushing hub. The release largely matched the figures observed in reports covering Tuesday’s weekly API inventory estimates.