Down From Highs, But China Optimism Ensures Strong Weekly Gain

Brent crude is off slightly for the session, last near $83.70/bbl. This is line with a slightly more risk-off tone in the cross asset space. Still, Brent is tracking +6.5% higher for the week. Technically, we have cleared the 20-day EMA ($81.99/bbl) but resistance remains around the 50-day at $84.41/bbl. WTI is close to $78.20 currently.

• Today's China trade figures will have given oil bulls some optimism, as oil import volumes remained strong in Dec, despite the domestic Covid wave. The China re-opening theme is a key driver of the stronger oil outlook this year, with oil consumption expected to hit fresh record highs this year.
• Elsewhere the US won't rule out the further releases from the SPR to curb domestic prices. The US House also voted to ban oil reserve sales to China, but the bill is unlikely to be taken up by the Democrat controlled Senate.
• Next week sees the World Economic FOrum kick off in Davos on Monday. On Tuesday, the Dec run of monthly activity data for China, along with Q4 GDP is due (which is expected to be negative q/q). The OPEC monthly report is also due on Tuesday. Wednesday delivers the IEA monthly report. Note the EIA weekly oil inventory report is due Thursday, delayed one day due to a holiday in the US on Monday.