Prices Continue To Rally But A Lot Of Uncertainty Going Into 2023

Oil prices are up around 0.5% on yesterday’s NY close, as US EIA data showed a drawdown in crude stocks, but have been trading in tight ranges. WTI is trading around $78.70/bbl and during today’s session reached its highest since early December. Brent is around $82.60 just below the intraday high of $82.71. DXY is down 0.3%.

• WTI conditions remain bearish but are in an upward corrective cycle and have traded today above the 20-day EMA of $76.80. The next level to watch on the upside is $79.79, the 50-day EMA. On the downside, the bear trigger is $70.31, the December 9 low. Brent has also broken through its 20-day EMA of $82.03.
• The US EIA reported a 5.89mn bbl drawdown in crude inventories after a 10.23mn build the previous week, which was the lowest at this time of year since 2014.
• There is a lot of uncertainty going into 2023, due to recession fears, the reopening of China, the effect of sanctions on Russian oil supplies and how OPEC will respond to these factors.
• Later today there are US jobless claims and the Chicago and Kansas Fed indices. The focus is on Friday’s personal consumption data which includes the Fed’s preferred measure of inflation for November, the core PCE – price index.