Crude Rallies On Signs Of Market Tightening

Oil prices rallied around 2% in response to signs of market tightening, despite the stronger dollar. US crude stocks fell 9.6mn barrels, the largest drop in 2 months. WTI rose 2.1% on Wednesday and continued moving higher in early APAC trade. It is currently around $69.32/bbl. The USD index rose 0.5%.

• WTI approached $70 reaching a high of $69.73/bbl on Wednesday post the EIA inventory data. $67 provided some support with the intraday low at $67.05. Resistance remains at $72.72, the June 21 high. Brent rose 1.8% to $73.78 down from the $74.42 high. $72 offered support with moves below unsustained. Resistance is still $77.24.
• The larger-than-expected EIA crude drawdown was driven by an increase in exports to above 5mbd. It was the first time since March that US exports exceeded imports. 4-week ma gasoline demand rose to its highest since December 2021. Gasoline inventories rose 0.6mn barrels and distillate +0.12mn.
• UBS revised its Brent forecast down $8/bbl in 2023 to average $81.
• Russia is planning to increase its seaborne diesel shipments by 11% in July to over 587kbd.
• Also on the supply side, a Norwegian rig strike was avoided after a wage deal was agreed.