Crude Close To Tuesday’s Highs Ahead of US CPI Data

During APAC trading today crude is holding onto Tuesday’s gains ahead of the release of the US CPI later, but it is in a narrow range. Both Brent and WTI have been moving sideways after rising around 2% and are currently around $85.62/bbl and $81.51 respectively. They are close to intraday highs, which are slightly above Tuesday’s highs.

• Bloomberg tanker tracking data showed that Russian output is finally softening with shipments below 3mbd. Also on the supply-side, pipeline flows from Iraqi Kurdistan remain stalled.
• Futures contract spreads are showing that the oil market is tightening following OPEC’s output cut decision.
• The EIA releases official US inventory data on Wednesday. On Tuesday the API reported a 400k build in crude stocks in the latest week and 500k in gasoline but a 2mn drawdown in distillate, according to Bloomberg from people familiar with the data.
• The focus later today is on US CPI data for March, as markets look for direction on the Fed. While the headline is expected to ease to 5.1% from 6%, core is forecast to rise 0.1pp to 5.6% (see U.S. CPI Preview: April 2023). In terms of the Fed, the FOMC minutes for March 22 are published and there are also a number of speakers including Kashkari, Barkin and Daly. The BoC also meets.