Crude Begins Recovery During Session, But Volatility Likely To Persist

Oil prices are up over a percent today after falling almost consistently since March 6. WTI is up 1.5% during APAC trading to be around $72.35/bbl after falling 4.4% on Tuesday. It is down 10% since last week’s peak. Brent is heading towards $80 and is currently up 1.4% to $78.50, close to the intraday high. The USD index is flat.

• Crude was supported today by stronger equities across the region and data from China indicating that the economic recovery is underway. Oil prices sank on fears that US banking problems would lead to a drop in demand. Volatility in the market is likely to continue while it waits for clarification on the banking sector and the Fed.
• China’s IP data today showed that production of energy-related products rose at the start of 2023 with crude oil up 1.8% y/y and crude processing +3.3% y/y.
• US February retail sales print later and are expected to decline after January’s very strong readings. The PPI for February is also published and expected to post smaller monthly rises than in January. Official EIA crude stocks and the IEA monthly report are released later today.