Tight Supply/China Demand, Fuel Further Gains

Brent crude extended Wednesday gains in the first bit of Thursday trade. We touched fresh highs of $97.69/bbl, but have consolidated somewhat since. The benchmark was last at $97.30/bbl, still +0.80% above Wednesday closing levels and tracking higher for the fourth straight session. WTI poked above $95/bbl (high of $95.03), but now sits slightly lower, last near $94.60/bbl.

• Today's momentum has largely been about concern on the supply side, following US data on Wednesday showing inventories at Cushing dropped below 22mln barrels, the weakest result since July 2022 and near operating minimums. Not surprisingly WTI prompt spreads remain very elevated.
• Analysts at J.P. Morgan also note that stronger China trucking activity as well as a pick in international travel ahead of the Golden Week period is providing additional support from a demand stand point (see this link).
• Focus for Brent is on whether we can break above $100/bbl, levels that haven't been seen since August last level. Note that the Nov 2022 high was $99.56/bbl. The 20-day EMA is back near ~$92/bbl on the downside.