- Oil slightly rebounds following three-day decline; demand concerns persist
- June ’23 WTI gained 35c this morning to trade around $68.95/Bbl
- Prompt month WTI lost nearly 10% or about $8 this week amid ongoing recession worries in the U.S. and other major economies
- Yesterday, the Fed raised rates by 25 bp as expected and hinted at a pause in the hiking cycle
- Additionally, ECB hiked rates by 25 bp, slowing the pace of hikes but hinting at future increases
- Fears of recession from higher interest rates and the uneven pace of Chinese demand recovery continue to weigh on prices
- Furthermore, EIA weekly storage report showed a gasoline stock increase, emphasizing recent fears of weakening fuel demand
- Russia Reaffirms Commitment to Crude Production Cut, Despite Increased Tanker Flows (BBG)
- Today, Russian Deputy Prime Minister Novak confirmed the nation's commitment to cutting crude production, stating that increased tanker exports don't significantly offset reduced pipeline shipments
- He added that pipeline deliveries to European customers have fallen by over two-thirds, with only partial compensation through seaborne exports
- Seaborne exports exceeded 4 MMBbl/d in the week ending April 28, per Bloomberg's tanker-tracking data
- In March, Russia announced plans to reduce crude output by 0.5 MMBbl/d until year-end
- China's Labor Day Holidays See Surge in Air Travel (BBG)
- China's Labor Day holiday air travel surpasses pre-pandemic levels, providing optimism for the oil market amid wider demand concerns
- Approximately 9.42 million air passenger trips were taken during the five-day break, a 4.2% increase compared to 2019
- China's jet fuel consumption is expected to be one of the largest drivers of global oil demand growth this year
- Additionally, vessel tracking data indicates that China's oil demand remains strong, with 125 supertankers carrying 250 MMBbl heading to the country by the end of April, the highest in over two years
- Traders expect China's oil appetite to stay relatively strong, although it is uncertain if it will match levels from earlier this year