Choppy session for oil – ING
It was a choppy session for the oil market yesterday. Initially, Brent rallied amid growing hopes of de-escalation in trade tensions between China and the US, with talks set to start this weekend, ING's commodity experts Ewa Manthey and Warren Patterson note.
Oil rallies, then retreats on Fed caution
"However, the market came under pressure later in the day after the Federal Reserve kept interest rates unchanged. The Fed signalled that rates will likely remain on hold until the effects of tariffs become clearer. This boosted the USD, which added to headwinds facing the broader commodity markets."
"Weekly inventory data from the Energy Information Administration (EIA) was less bullish than American Petroleum Institute (API) numbers the previous day. EIA data showed that US crude oil inventories fell by 2.03m barrels over the last week vs. the 4.49m barrels decline reported by the API."
"However, this still leaves crude oil inventories at their lowest level since March. Similarly, crude oil stocks at Cushing hit their lowest level since March, falling by 740k barrels. For refined products, gasoline inventories increased by a marginal 188k barrels, while distillate stocks fell by 1.12m barrels. On the demand side, the standout was jet fuel. Demand increased by 474k b/d week on week, hitting its highest level since December 2019. This keeps the 4-week average for demand at an all-time seasonal high."
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FXStreet Insights Team
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