Firmer Since Settlement

Broader risk assets have recovered some poise since Tuesday’s settlement, which has allowed WTI & Brent crude futures to add a little over $1.50 vs. their respective settlement levels. There hasn’t been much in the way of overt headline flow to facilitate such a move after yesterday’s notable downtick in prices.

• The major benchmarks still sit the best part of $20 shy of their cycle highs.
• Goldman Sachs reiterated their view that the recent fall in prices is “excessive,” yet understandable “in the context of low year-end liquidity and risk appetite.”
• The weekly API crude inventory estimates revealed a slightly shallower than expected drawdown in headline crude stocks, coupled with an uptick in gasoline & distillate inventories, as well as a build in stocks at the Cushing hub. On net, that report appeared a little bearish, but had no lasting impact on prices.
• Weekly DoE inventory data and the heavily awaited OPEC meeting (ahead of Thursday’s OPEC+ gathering) headline on Wednesday. Re: the latter, focus will be on any language pointing to a deviation from the previously outlined plan i.e. a cumulative 400K bpd lift in production from OPEC+ pact participants in January, which would be deemed a response to the recent coordinated stockpile release from some of the major oil consuming nations. Note that questions remain re: the ability of some of the participating producers when it comes to enacting the outlined lift in production.