Prices Range Bound As News Impacts Both Supply And Demand Outlook

Oil prices have been range bound and are in line with their New York close at around $95/bbl for Brent and $88.50 for WTI, as tight supply balances demand fears. WTI has been trading between $88.50-$89.50.

• The market is watching the results of the US mid-term elections closely for any impact they may have on the USD. So far the outcome is unclear. A weaker USD would be positive for oil prices as it makes it cheaper for foreign buyers.
• Beijing reported the highest number of Covid cases in more than 5 months, which raised concerns that any reopening would be delayed, but the lockdown in the area around the iPhone plant was lifted. The market still hopes that there will be some easing of restrictions in China but currently there is little to suggest anything is planned.
• On the supply front, the US revised down its 2023 oil production forecast to 12.31 mbd signalling that its shale oil is unlikely to be able to boost global supply in a tight market. The latest US API data showed a build in crude inventories of 5.618 mn barrels not completely unwinding last week’s 6.53 mn drawdown. Already low stocks of distillate fell a further 1.8 mn barrels but gasoline rose 2.6 mn. The EIA data will be out overnight.