Prices Higher On Improved Demand Hopes And Supply Uncertainty

MNI (Australia) - Oil prices are higher today on an improved demand outlook from the reopening of China. WTI is up 0.8% and is trading around $71.60/bbl and Brent us up 0.6% to $76.50. Crude was slightly higher on Friday but ended the week down about 10% as recession fears grew.

• Oil has been trading in a range of just over a dollar during the session. WTI hit a low of $71.22 and a high of $72.32 today. While Brent had a high of $77.35 and a low of $76.11.
• Crude trend conditions remain bearish. WTI broke $74.96, the September 28 low, and has remained well below that level today. WTI has been moving closer to the psychologically important $70 level.
• The closure of the Keystone pipeline which connects oil fields in Canada to US refiners has also supported crude prices. It is unknown when it will reopen.
• Last week a price cap on Russian oil and EU sanctions on seaborne shipments came into effect. The backlog of ships going through Turkish waters is apparently clearing but Turkey is requesting proof of insurance from tankers. According to the FT, Russia has 100 vessels prepared with non-western insurance and is selling oil above the cap to non-participating countries. Markets are watching for a cut in Russian output.
• The Fed meets this week and a 50bp rate hike is expected to be announced on Wednesday. Fears of a US recession have weighed on oil prices.