Prices Lower On Demand Fears, IEA Positive On Outlook

Oil prices fell on Tuesday as data from China showed the recovery losing steam and on nerves over US debt ceiling talks, but robust US retail sales data provided some support pushing prices close to their intraday high. WTI fell 0.8% and reached a low of $70.45/bbl but has started the session slightly higher at $70.65. Brent is 0.6% lower and is around $74.91. The USD index is 0.2% higher.

• WTI support lies at $70.67 and Brent at $73.49.
• The IEA published its monthly outlook and revised up its global oil demand expectations driven by stronger demand from China which it adjusted up by 200kbd to 2.2mbd. It is also predicting that inventories will decline by 2mbd in H2 2023.
• While there have been supply disruptions in Canada and Iraq, Russian supply has appeared to remain strong. India has been a large buyer of Russian crude and now there is pressure on some EU members to stop purchases of Russian oil that they are importing from India.
• According to Bloomberg, API reported another US crude inventory build of 3.69mn after 3.62mn the previous week. Gasoline fell 2.46mn and distillate fell 0.886mn.