Prices Hold Onto Wednesday’s Gains, IEA Monthly Report Coming Up

While oil prices are up moderately on the day after rising almost 2% on Wednesday, they are off their early session highs despite a dovish Fed and continued dollar weakness (USD index -0.4%). Brent is up 0.4% to $74.56/bbl but down from the intraday high of $74.95. WTI is 0.3% higher at $69.69/bbl but it rose to just above $70 early in trading.

• Pessimism re the demand outlook, scepticism that OPEC members will comply with their new quotas and expected robust supply growth, especially from non-OPEC producers, aren’t far from the market’s mind and the move off today’s highs demonstrates that. But there may be a floor under the market if US inventories stay low.
• The IEA monthly report is published later today and it will be interesting to compare its demand projections with the more optimistic OPEC ones released yesterday. OPEC still expects a deficit in Q1 2024, while other indicators point to a surplus due to robust supply flows.
• Later the BoE and ECB meet and both are expected to leave rates unchanged. Also US November retail sales will be watched closely. There are US jobless claims and trade prices.