Oil Prices Hold Onto Gains, Key Market Events This Week

Oil prices have continued climbing during APAC trading today. They rose over 2% on Friday and are up a further 0.6% today on better demand news with robust US data helping to ease recession concerns, continued refilling of the US SPR and China’s Politburo recommending further fiscal stimulus at “an appropriate pace”. The USD index is 0.1% higher.

• Brent broke above $76 during today’s session and is up 0.7% to $76.34/bbl, close to the intraday high. WTI has mainly traded above $71 and is currently 0.6% higher at $71.65. Both benchmarks remain down about 6% in December though, as expectations of a market surplus grew. The key events for oil this week will be Tuesday’s US CPI and Wednesday’s Fed decision.
• The US Energy Department has put out a tender for 3mn barrels of crude for March delivery to continue refilling the SPR.
• Last week OPEC+ members tried to calm the market by voicing their commitment to the latest cuts and to stabilising the market. This week monthly IEA, EIA and OPEC reports should provide more information on the outlook for crude.
• Timespreads in the futures market continue to point to a market surplus as later dated contracts are trading at a premium, according to Bloomberg.
• The calendar is very light today with only US NY Fed 1-year inflation expectations.