Crude Rallies On Signs Of Higher China Demand, Brent Hits 50d MA

Oil prices rose around 1.5% on Wednesday after falling the first 2 days of the week, as Fed Chair Powell’s message was similar to the last meeting and on signs of increasing demand from China. WTI is up 1.8% to $72.48/bbl, close to the intraday high of $72.72, and +0.8% on the week. Brent increased 1.3% to $76.91 after a high of $77.24 and is +0.6% on the week. The USD index fell 0.4% after Powell said that most FOMC members believe that rates will have to rise “somewhat” further this year.

• WTI continues to trade well below resistance at $75.70, the June 5 high, and the outlook is bearish. It has held above $70 for most of this week. Support lies at $67.21, the May 31 low. Brent has reached its 50-day simple moving average.
• Bloomberg is reporting API measured US crude stocks fell 1.2mn barrels in the latest week according to sources familiar with the data. Gasoline rose 2.9mn but distillate fell 0.3mn. Prices eased slightly following the data. The official EIA data is published later today.
• Increased demand from China and Japan has lifted Middle Eastern oil prices.