Working Away From Lows; Chinese Fuel Export Quota Eyed

WTI and Brent are $0.50 firmer apiece, consolidating a little above recent lows as the bearish impetus from Wednesday’s decline in crude has moderated.

• To recap, both benchmarks gave up early gains of as much as $2-3 apiece (derived from Russian Pres. Putin announcing a partial mobilisation of the Russian military), dipping below neutral levels after the Fed raised rates by 75bp (keeping in mind wider worry re: a Fed-led economic slowdown), before falling to fresh session lows on the EIA’s weekly inventory data.
• To elaborate on the latter, EIA data pointed to a below-expectations build in crude stocks, a surprise build in gasoline and distillate inventories, and an increase in Cushing hub stocks, largely corroborating reports of the API’s inventory estimates on Tuesday.
• Elsewhere, participants will be keeping an eye on news of fuel export quotas from the Chinese authorities as Chinese crude stockpiles have declined.
• The above comes amidst rising expectations from some quarters for a larger quota to support the flagging economic growth outlook, possibly improving the outlook for crude demand, while adding to global oil product supplies