WTI Holds Near Recent 13-Week Highs; U.S. Inventories Eyed

WTI and Brent deal ~$0.40 firmer apiece at typing, putting them narrowly on track to close higher for the fourth session in five.

• To recap, both benchmarks whipped between gains and losses on Tuesday to ultimately close ~$1 firmer, with WTI struggling to make headway above the $120 handle after backing away from 13-week highs ($120.99) made on Monday.
• Prevailing worry re: tightness in global crude supplies has continued to mix with expectations for a rise in global fuel demand for the remainder of ‘22, helping crude to catch a bid in recent sessions. Adding to the debate, the U.S. EIA has forecast Russian fuel exports to decline by ~18% come end-’23 (~2mn bpd decline in supply), mainly on the EU’s incoming, phased ban on Russian crude.
• Production at Libya’s recently-restarted Sharara oilfield (~280K bpd capacity) has been reportedly halted since late Monday, while ~10% of Norway’s offshore oil and gas workers are due to strike later on Sunday should relevant negotiations fail.
• The latest round of U.S. API crude inventory estimates crossed late on Tuesday, with reports pointing to a surprise build in crude inventories and an increase in gasoline and distillate stockpiles, while Cushing hub stocks declined.
• Looking ahead, U.S. EIA inventory data is due later on Wednesday (1530 BST), with WSJ and BBG estimates pointing to expectations for a drawdown in crude inventories.