Crude Continues To Rally On Demand Optimism

MNI (Australia) - Oil prices are higher today but have been trading in a narrow range of less than a dollar. Optimism regarding the outlook for the Chinese economy drove the market and prices reached their highest since the start of January, despite a stronger USD (DXY +0.5%). WTI is currently around $80.75/bbl and Brent $86.45.

• The January rally means that crude is now around its 100-day simple moving average. A short-term bullish trend continues with key resistance and bull trigger for WTI at $81.50.
• OPEC released its monthly outlook on Tuesday and expects the market to be balanced in Q1 2023. The Secretary General also said that he’s “cautiously optimistic” about the global growth outlook. The IEA will issue its monthly report later today, which should contain information on the impact of sanctions on Russian supply and the demand outlook. A Bloomberg survey showed that analysts expect Chinese oil demand to reach a record high this year.
• There is a busy data schedule in the US today with the focus likely to be US December retail sales and PPI. Retail sales are expected to post another monthly decline, while the core PPI is also projected to decline on the month. IP, API fuel inventory data and the Fed’s Beige Book are also scheduled to be released.