Range Trading As Tentative Signs Of Market Easing
Oil appears to be in a holding pattern ahead of US data after falling overnight with the deterioration in risk appetite. Both WTI and Brent are currently very close to yesterday’s close around $85.80/bbl and $92.70. They have been in a tight range during the session awaiting US CPI to be released later.
- The EIA reported a larger-than-expected 3.925mn build in crude inventories in the US in the latest week, its highest level since July 2021, after a 3.115mn drawdown the previous week. Importantly, production rose 200 kbd, tentatively suggesting a slight easing of supply conditions. But gasoline stocks fell 900k and distillate fell 500k barrels.
- Further Covid restrictions in the manufacturing centre of Guangzhou in China darkened the oil demand outlook.
- The WTI prompt spread has narrowed since the start of the month suggesting some easing of supply conditions.