- Oil set to post the biggest weekly gain since early October
- Prompt month (Jan '23) WTI is set to post a nearly $5/Bbl weekly gain
- WTI extends losses and is down by $2.15 this morning to trade below $75/Bbl
- Limited disruption to Russian supply and hawkish tone from the Fed headed into 2023 continue to weigh on crude prices
- In addition to the rate increase by the Fed on Wednesday, the Bank of England and European Central Bank also increased rates yesterday
- However, 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
- TC Energy is awaiting regulatory approval from PHMSA for a full restart of the 0.622 MMBbl/d Keystone oil pipeline
- Early signs indicate that Russia's Asian oil flows show signs of weakening (BBG)
- The loadings on the ESPO pipeline, which transports oil from east Siberia to the Pacific, have decreased by half since the cap was implemented
- However, the Urals grade oil supplied from western Russia is still freely flowing to Asian clients as it is well below the $60/Bbl level
- Oil tanker companies may be avoiding sending ships to the port of Kozmino (an oil terminal in Eastern Russia that sends cargoes to Asia-Pacific markets) as the price of the key ESPO grade is about $10/Bbl above the G-7 price cap
- However, people who trade ESPO said it is still too early to determine whether the decline in flows is structural, as tanker tracking may not be too accurate