Oil prices fell for the 6th straight day – its longest of the year so far – as The Fed Minutes confirmed higher rates for longer, bringing into question growth/demand expectations for crude.
“Crude remains trapped in a choppy trading pattern, with rising interest rates, and thoughts of a slowing economy keeping downside pressure,” said Dennis Kissler, senior vice president of trading at BOK Financial Securities.
The price weakness is defying early optimism of a demand resurgence from China’s reopening, but reflects a shockingly high series of inventory builds across all cohorts in the last few weeks.
Inventories built across all cohorts with another major build in crude stocks…
As one veteran energy market trader MSG’d us, “…wtf is with these numbers?”
We do note that the official data tomorrow will be tightly watched for the so-called ‘adjustments’ which have been dramatic to say the least in recent weeks…
WTI was hovering around $74.00 ahead of the API print, and extended the day’s losses after…
“Crude oil prices dipped further with dollar strength in play as the expectations of rate hikes from the Fed continued to ramp up … Geopolitical concerns still running high this week, potentially providing a floor to oil prices. Overall, the oil market remains rangebound, in Brent between $80 and $89 and WTI between $73 and $82, as the market weighs the impact of rising demand in China and India versus a potential slowdown elsewhere,” Saxo Bank noted.
Morgan Stanley on Wednesday became the latest bank to trim price forecasts, projecting that the market will be oversupplied in the first quarter and balanced in the second quarter, before edging into a deficit in the second half.