Prices Recover On Weaker USD, Robust China Imports & OPEC Cuts

Oil prices finished higher on Wednesday after falling through the APAC session, on the back of USD weakness. The greenback picked up following the BoC’s surprise rate hike but oil held onto most of its gains supported by recent OPEC cuts and robust Chinese crude imports. The USD finished flat.

• WTI rose 1% and is around $72.48/bbl. It reached a high of $73.19 during the NY session after a low of $71.01 earlier. It is trading well below resistance of $75.06. Brent is 0.6% higher to $76.76 after reaching an intraday high of $77.64. It held above $75.50 early in the London session. The bull trigger is at $78.73, June 5 high.
• A large increase in refinery utilisation to 95.8%, highest since August 2019, drove an unexpected drawdown in US crude inventories. Refiners are expecting strong demand through the summer. EIA data showed a 452k barrel crude drawdown with gasoline up 2.75mn and distillate up 5.07mn, on the back of increased refining. US imports from Saudi Arabia fell 88%. The DOE reported a 1.6% increase in US oil production to a 3 year high.
• Bloomberg reported that an Indian oil official stated that OPEC+ wants oil prices up to $80/bbl. Also that there is no shortage of crude in the market, so the Saudi output cut won’t impact Indian refiners.