WTI Falls 1.3% Hours Before Asian Session

WTI pressured on Wednesday while futures rose marginally. Political standoff in Libya has highlighted the fragility of oil supply. Crude oil is down in late North American trade by some 1.28% and has fallen from a high of $103.92 to a low of $99.93 into the close. It posted a small gain on Wednesday in the figures markets, however, after day-prior losses following a report showing US inventories unexpectedly dropped last week. WTI crude for May delivery closed up US$0.14 to US$102.19 per barrel.

The political standoff in Libya has highlighted the fragility of oil supply. The latest hiccup on the supply side also comes at a time when demand for energy products is firming once more, driving a tightening in crude oil time spreads and cracks, and informing our decision to re-engage upside in far-dated Brent.

The Energy Information Administration reported an unexpected 8-million barrel drop in US oil inventories last week, the largest since January 2021. nevertheless, it is far from recovering from Tuesday’s collapse of more than 5%. Chinese demand-side weakens pertaining to the Covid-19 lockdowns partly forced the International Monetary Fund to cut its global growth forecast to 3.6% from 4.4% when also weighing the disruption of Russia’s war on Ukraine and higher inflation.


Tracking of traffic conditions for the 15 largest cities by vehicle registrations suggests that the impact of China’s “dynamic” Zero-Covid strategy may already be easing, after catalyzing a sharp drop in energy demand. Chinese demand headwinds is expect ed to transform into tailwinds as officials call for additional economic support.