Oil Prices Down Slightly After Post-US CPI Rally, Awaiting FOMC

Oil prices rose around 3% overnight as the USD and UST yields fell following the softer-than-expected US inflation data for November. They are down 0.3% but have been range trading during today’s session awaiting tonight’s FOMC announcement. WTI is currently around $75.20/bbl and Brent $80.40.

• WTI cleared resistance of $75.44 overnight but is now trading below it again. A dovish Fed tonight could open up the 20-day EMA of $77.74 for WTI and $83.33 for Brent.
• OPEC reduced its demand forecasts for early 2023 on expectations of slower global GDP growth and it now sees the market in balance in Q1 rather than the deficit it had previously expected.
• On the supply side, the reopening of the Keystone pipeline was delayed due to bad weather. It is expected to be partially reopened today but be fully open on December 20, according to Bloomberg.
• API reported an increase in crude inventories of 7.82mn barrels last week after a 6.43mn drawdown the week before. There were also increases in distillate of 3.4mn barrels and gasoline of 0.88mn.
• Overnight the FOMC decision is announced and analysts expect a smaller 50bp hike. There is also US EIA inventory data and the International Energy Agency will publish its monthly report.