- Oil extends gains for a sixth-consecutive day
- Feb ’23 WTI gains nearly $1.50 this morning to trade around $79/Bbl
- US inflation slowed to 6.5% in December, the sixth consecutive monthly decline since its peak in mid-2022 (WSJ)
- This decline might ease the pressure for aggressive rate hikes from the Federal Reserve
- The core CPI, which excludes food and energy prices, rose 0.3% last month and was up 5.7% from a year earlier, according to a Labor Department report on Thursday
- The market continues to be optimistic about a recovery in Chinese demand as the country lifts Covid restrictions ahead of the country’s Lunar New Year travel season
- EIA reported a 19 MMBbl crude build yesterday for the week ending January 6 against an API estimation of a 14.9 MMBbl build
- It was the largest weekly build since February 2021 and the third-largest increase on record
- The large build in oil inventories was probably due to refinery shutdowns after the winter storm Elliot, along with lower exports and higher imports
- Refinery utilization rates rose to 84.1% but remained below the 92% level reached before the shutdowns. Runs are anticipated to rise when more refineries resume operations
- Additionally, US jet fuel inventories reached their lowest level since 1996, which caused the premium for New York jet fuel over diesel futures to increase to $1.25/gal, the biggest level since 2008
- Russian Deputy Prime Minister Novak said that despite sanctions, his nation had no trouble selling its crude (Reuters)
- Russia has “been in constant contact with companies, the contract making for February has been completed, and on the whole, the companies are not saying they have problems as of today,” said Novak during a televised government meeting on Wednesday
- He added that the biggest hindrance for Russian crude had been the significant discount to global benchmarks as well as rising freight costs