Crude Higher As Increased China Demand Hopes Resurface

Oil prices have been gradually trending up during APAC trading after falling by around 3% on Wednesday after FOMC minutes revealed that “a few” members called for a 50bp hike and tightening fears grew. WTI is up 0.5% to around $74.35/bbl and Brent 0.5% to $81.00, both close to their intraday highs. The USD index is down 0.2%.

• Brent has been outperforming WTI on the back of growing US crude stockpiles and hawkish Fed repricing. WTI cleared support of $75.32, the February 17 low, on Wednesday and the next level to watch is $72.25, the February 6 low. Brent also broke through its support of $81.80 and the next level is at $79.10, the February 6 low.
• API reported a further build in US crude inventories of 9.895mn barrels after 10.507mn the previous week. Gasoline stocks rose 0.89mn and distillate 1.37mn. The official EIA data is out later today. Refining maintenance is resulting in crude being stockpiled.
• The market continues to hope for prices to rise on increased demand from China but forecasts are being revised down, as it appears that Russia is meeting much of additional Chinese consumption and a more hawkish Fed is being priced in.
• Later the Fed’s Bostic and Daly speak. The Kansas and Chicago Fed indices and initial jobless claims print. There is also a revised estimate of Q4 US GDP.