- Oil trades higher as the market weighs China’s demand outlook
- WTI gained nearly $1 this morning to trade above $75/Bbl
- China pledged to boost consumption and support small businesses as Beijing adjusts its focus to boosting growth (BBG)
- China's President Xi Jinping said that expanding and restoring consumption should "take precedence" at a conference to establish the economic policy priorities for 2023
- However, China confirmed two COVID-19-related deaths today for the first time since December 3 as the nation gradually relaxes COVID-zero policies
- China's swift reversal of its Covid-zero policy has given rise to optimism for the long-term demand, although the near-term forecast is uncertain due to surging virus cases
- The Biden administration announced plans to purchase 3 MMBbl of oil to refill the SPR on Friday (BBG, WSJ)
- The Energy Department solicited bids on Friday for purchases of crude for delivery in February
- The DOE said, “this repurchase is an opportunity to secure a good deal for American taxpayers by repurchasing oil at a lower price than the $96/Bbl average price it was sold for, as well as to strengthen energy security” in a note on Friday
- According to a senior administration official, the US will buy additional oil to refill the SPR in the future depending on crude prices
- Additionally, the DOE is planning a crude oil exchange of 1.8 MMBbl to address the potential supply disruptions brought on by the Keystone pipeline shutdown