Crude Rising On Hopes Of Increased Demand From China

Oil prices are higher today as the market is hoping for economic stimulus in China. They fell on Wednesday in the wake of a strong US crude stock build and robust US retail sales. Brent is up 0.5% today to $85.80/bbl after falling 0.35% yesterday and WTI is up 0.6% to $79.09 after -0.7%, both are close to their intraday highs.

• Brent remains above its 100-day simple moving average while WTI is approaching its 100-day MA. Brent and WTI have been holding above the February 9 support levels.
• The US EIA reported a significant 16.28mn build in crude inventories after 2.42mn the previous week. The stock build this year is being driven by a reduction in refining due to maintenance and December’s cold snap and so the usually refined crude is being stockpiled despite lower imports and higher exports.
• The UAE energy minister pointed to the US crude stockpiling as an indicator that there is plenty of supply. It is unlikely that OPEC+ will change its output quotas any time soon.
• The IEA revised up its 2023 oil demand forecasts by 0.1mbd to 2mbd.
• Later today the Fed’s Mester, Bullard and Cook all speak. In terms of data, there will be more detail on the inflation front from the January PPI, which is expected to see a pickup in monthly increases but the annual rates should ease. There are also January housing starts & permits, jobless claims and Philadelphia and NY business indices for February.