Oil Prices Up Slightly On More Optimistic Chinese Demand Outlook

MNI (Australia) - Oil prices are up 0.5% during the session after two days of weakness, but have been trading in a very narrow range of less than a dollar. The DXY is flat. News of further easing of Covid-related restrictions in China boosted crude on hopes of increased demand.

• WTI is trading around $77.35/bbl after reaching a high of $77.88 and a low of $77.26. It broke support of $78.40 overnight and the next level to watch is $73.38. Brent is around $83.10 after a high of $83.68 and low of $83.08.
• The market is assessing how the oil price cap on Russia will impact supply over the long term. Apart from some ships stranded near Turkey, there has so far been minimal disruption, according to Bloomberg. Currently the price cap of $60/bbl is above where Urals crude prices are and while that continues, the cap is unlikely to have much impact.
• Time spreads suggest that near-term supply is unproblematic.
• With the Fed in blackout, there is little going on overnight. The only data of note is the US trade balance for October and the API inventory data.