Crude Soars On US CPI Data And Signs Of Tightening Supply

Oil prices rose sharply following the larger-than-expected easing of US headline inflation to 5%. Core though rose 0.1pp to 5.6% as projected. It was also supported by further signs of tightening supply. Crude is about 2% higher with WTI around $83.06/bbl and Brent $87.33. The USD index is 0.7% lower.

• WTI broke through key resistance at $83.04, the January 23 high, to open up $85.01, the November 14 high. It reached a high of $83.53 on Wednesday, as the USD weakened following the CPI release, from a low of $81.28 earlier. Brent has approached resistance of $87.87, the January 27 high, but didn’t breach it with the intraday high reaching $87.49.
• The EIA reported a 597k barrel crude inventory build despite imports falling 951kbd. But at Cushing stocks fell for a 6^th consecutive week to be near the lowest since January. Distillate stocks fell 606k and gasoline -330k, suggesting strong demand ahead of the driving season. Refinery utilisation fell 0.3% last week.
• According to Bloomberg, Russian oil shipments fell below 3mbd for the first time in almost 2 months.