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Fresh YTD Highs Amid Inventory Drop

OIL

Brent crude got to fresh YTD highs above $97/bbl in US trade on Wednesday. We closed at $96.55/bbl, a +2.76% gain. WTI got briefly above $94/bbl and we track just under $93.80/bbl in early trade today (after posting a 3.64% gain on Wednesday).

  • Sentiment was boosted by a further draw in US crude inventories. Crude inventories at Cushing fell for the seventh week with a draw of 943k this week taking stocks to the lowest since July 2022, getting close to the operational low of 20mbbls.
  • Crude inventories in the European ARA region fell -1.025mbbls in the week ending 22 Sep according to the latest Genscape data.
  • Some optimism around the China economic backdrop, post yesterday's industrial profits rise also likely helped at the margin.
  • For Brent, a clean break above $97/bbl we see the market targeting a move towards early Nov 2022 highs, which printed at $99.56/bbl. On the downside, the 20-day EMA trend remains strongly positive and comes in at $91.95/bbl.

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