Crude Higher On Sustained USD Weakness And Supply Disruptions

Oil prices are up 0.8% during APAC trading after falling over 1% on Wednesday. They fell sharply following the weak China CPI data for April but have rebounded since, as the greenback held onto its post-US CPI weakness. The USD has been flat today but is still down 0.2% from Wednesday’s close.

• WTI is close to its intraday high at $73.11/bbl after reaching a low of $72.73 following China’s CPI. Resistance is at $73.93. Brent is trading around $77.00, but has struggled during the session to hold onto gains above this level. The intraday high was $77.07 and the low $76.54. Resistance is $78.49, the 20-day EMA.
• Supply continues to be interrupted by wildfires in Alberta, Canada. In addition, Iraq has reported that exports from the Turkish port of Ceyhan are yet to resume in a dispute that has been ongoing for a number of months. But the US reported a significant crude inventory build.
• On the demand side, the market is worried that demand from China won’t increase as expected following a 0.1% y/y CPI read but in the other direction, the US announced this week that it will refill the SPR towards the end of the year.
• OPEC+ releases its monthly outlook report later on Thursday. The Fed’s Kashkari and Waller also speak and there are US jobless claims and April PPI data. The PPI is forecast to rise around 0.3% m/m resulting in a moderate easing of the annual rates. The BoE meets later and another 25bp rate hike is expected.