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OIL: Crude Steady Ahead Of Fed Decision Later

OIL
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Oil prices are little changed today ahead of the Fed decision and are holding onto this week’s losses driven by soft China data and weaker risk appetite. They have found some support from an earlier reported US inventory drawdown. WTI is up 0.1% to $70.13/bbl after a low of $70.05 and a high of $70.34. Brent is slightly higher at $73.23 following a peak of $73.43. The USD index is flat.

  • With attention on the supply side, Bloomberg reported that there was a US crude inventory drawdown of 4.7 million barrels last week, larger than expected, according to people familiar with the API data. Product stocks continued to rise though with gasoline 2.4mn barrels higher and distillate +744k. The official EIA data is out later today. 
  • Sanctions are tightening on Russian crude exports with the EU adding over 50 ships to its blacklist and now the UK has announced measures aimed at key players in Russia’s oil industry and also its shadow fleet. The US is also looking to lower its price cap.
  • The effect of the incoming Trump administration on oil prices remains unclear with increased US supply likely but also increased sanctions on Iran reducing its ability to export. The uncertainty is contributing to crude’s current range trading, according to Westpac.
  • Later the Fed decision is announced and a 25bp rate cut is widely expected (see MNI Fed Preview). There are also US November housing starts/building permits and Q3 current account data, as well as UK November CPI/PPI. The ECB’s Lane speaks. 
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Oil prices are little changed today ahead of the Fed decision and are holding onto this week’s losses driven by soft China data and weaker risk appetite. They have found some support from an earlier reported US inventory drawdown. WTI is up 0.1% to $70.13/bbl after a low of $70.05 and a high of $70.34. Brent is slightly higher at $73.23 following a peak of $73.43. The USD index is flat.

  • With attention on the supply side, Bloomberg reported that there was a US crude inventory drawdown of 4.7 million barrels last week, larger than expected, according to people familiar with the API data. Product stocks continued to rise though with gasoline 2.4mn barrels higher and distillate +744k. The official EIA data is out later today. 
  • Sanctions are tightening on Russian crude exports with the EU adding over 50 ships to its blacklist and now the UK has announced measures aimed at key players in Russia’s oil industry and also its shadow fleet. The US is also looking to lower its price cap.
  • The effect of the incoming Trump administration on oil prices remains unclear with increased US supply likely but also increased sanctions on Iran reducing its ability to export. The uncertainty is contributing to crude’s current range trading, according to Westpac.
  • Later the Fed decision is announced and a 25bp rate cut is widely expected (see MNI Fed Preview). There are also US November housing starts/building permits and Q3 current account data, as well as UK November CPI/PPI. The ECB’s Lane speaks.