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Crude Stronger On Improved Demand Optimism And Supply Outages


Oil has been trading in a tight range during today’s APAC session. WTI is up 1% to $74.90, close to the intraday high of $74.98 and Brent is up 1% to $81.80, just below the high of $81.84. The market has been more positive today after Saudi Arabia signalled confidence in the demand outlook and reports of supply outages.

  • Saudi Aramco, Saudi Arabia’s public energy company, increased prices for mainly the Asian market in March reflecting its optimism in the demand outlook.
  • On the supply side, the pipeline from Kurdish oil fields in Iraq that goes through Turkey has been closed due to Monday’s earthquake. Usually 450kbd goes through that pipeline. Turkey also stopped flows to the Ceyhan export terminal. In addition, there was a power outage at a large Norwegian field.
  • In January, Russia saw a 46% drop in oil and gas revenues, putting pressure on the government deficit. This was due to a drop in the price of Urals blend and in natural gas exports. The market is still watching for the impact of the latest sanctions on Russian supply.
  • Later Fed Chairman Powell speaks, which could be important for direction on the rate outlook. On the data front there is US December trade data and January NFIB business optimism. There is also US API inventory data released.

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