The oil rally of the past two weeks continues, even though in a more tempered manner, on the back of U.S. commercial crude supplies shrinking, Russia starting to implement its OPEC/OPEC+ commitments and China promising to do whatever it takes to avert an economic slowdown.
Beijing duly demonstrated the seriousness of its intentions – following weak December trade data, the Chinese National Bank has injected a record amount of cash into the economy via reverse repo operations, further backing it up with a robust PR drive. As a consequence, the global benchmark Brent traded between 60 and 60.5 USD per barrel on Wednesday afternoon, whilst WTI hovered around 51.5-52 USD per barrel.
1. US Stocks To Stay Around 440 MMbbls
• Having fallen by a modest 1.7 MMbbl in the week to 439.7 MMbbl ending January 04, U.S. commercial crude stocks, as per last week, are expected to experience an insignificant decline or stagnation.
• In doing so, stocks have been increasing for seven consecutive weeks in Cushing, Oklahoma, whilst Gulf Coast stocks have fallen by some 5 MMbbl month-on-month.
• Gasoline stocks are expected to continue their build for the eighth consecutive week, with a further 2.5-3 MMbbl stock build expected in the week ending January 11.
• A further uptake in distillate stocks is also assumed, albeit at a much smaller pace than the 10+ MMbbl week-on-week increases in the last…