Prices Moving Sideways After Recent Sharp Falls

MNI (Australian) - Oil prices have been steady today, in line with a stable USD, after falling for the last 3 days. WTI is trading 0.2% above the NY close at $74.40/bbl and Brent is around $79.60 up 0.3%.

• Crude prices have been trading in a narrow range again of less than a dollar. WTI’s intraday low was $73.93 and its high $74.82. It has remained above its key support of $73.38. Brent has been trading between its low of $79.13 and high of $79.93 and any further downward momentum could test $77.04.
• Demand concerns intensified on continued central bank tightening and warnings from major banks that 2023 is going to be a difficult year, despite recent easing of Covid restrictions in China, the world’s largest oil importer. Traders are also closing positions ahead of year end.
• In retaliation for western countries’ price cap on Russian oil, Russia is looking to set a price floor for its exports either per barrel or a maximum discount.
• API data overnight showed a crude drawdown in the US of 6.426mn barrels after destocking of 7.85mn the previous week.
• Tonight the main event is likely to be the BoC meeting where they are expected to hike another 50bp. There is also US EIA inventory data, US unit labour costs for Q3 and a number of ECB speakers.