Oil price drop – China (Shanghai) COVID-19 lockdowns cited

This via ANZ, in summary from a longer piece:

• Authorities said that it will undertake a staged lockdown of Shanghai as they try to contain its spread.
• Traffic data from Baidu shows peak morning time congestions is down 45% y/y as workers stay home.
• Shanghai accounts for 4% of China’s total oil consumption.
• Markets are fearing the outbreak could ultimately put under threat the 15.5mb/d of oil the country consumes.
• A temporary pause in hostilities by Yemen’s Houthis against Saudi Arabia also eased concerns of supply disruptions. However, Russian oil exports continue to suffer. The country’s average daily shipments fell to 495,300 tons (~3.63mb/d) in the week starting 17 March. This is down 26.4% w/w, according to figures seen by Bloomberg.

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Oil price update … can’t say I am overly convinced about the Shanghai narrative. Still, the demand for narrative never dips for long, does it?

ps. Opec+ coming up later this week!