Crude Continues Recovery As Fundamentals Look More Positive

Oil prices continued their post-banking troubles recovery on Tuesday as the Fed moved as expected and strong US fuel exports were reported. WTI rose above $70 but is now just below and Brent is up 0.6% to $75.75.

• Brent reached a high of $77.12 and WTI $71.31 post the Fed but then eased back, as risk sentiment deteriorated. Both cleared their resistance levels which opened up $78.84 and $72.71 respectively. Bullish crude positions held by money managers fell to their lowest since the pandemic, according to CFTC data, which skews risks to oil prices to the upside.
• EIA reported that US exports of crude and refined products rose to a record 12mbd, which implies that demand is stronger than the market thought. US oil output is also up 700kbd on the year. Crude inventories rose 1.117mn to their highest since May 2021 while gasoline fell 6.4mn and distillate 3.3mn.
• The EIA announced that as of 2024 it will change how it counts products which are blended into crude. Its 2022 calculations overstated demand but understated output. The changes when applied to 2022 would have reduced demand estimates by 400kbd.