- WTI moving higher along the micro trendline support.
- Focus could be returning to structural supply risks amid a potential recovery in demand from China.
West Texas Intermediate, (WTI), is higher on Thursday by some 0.38% and has reached a high of $78.77 from a low of $78.36. It has made the highest since December 2 on the back of a larger-than-expected drop in US inventories. At the same time, Saudi Arabia’s oil minister said OPEC+ will continue to manage the market to support prices.
In a weekly survey, the Energy Information Administration said US oil inventories dropped by 5.9-million barrels in the prior week, way above the consensus that analysts estimated which was for a 0.17-million barrel draw, according to Oilprice.com. Meanwhile, OPEC+ is said to continue to actively manage the market as it looks to maintain oil prices, Saudi Arabia’s oil minister was reported to have said.
Analysts at TD Securities recently said WTI and Brent crude were showing ”nascent signs that the epic repricing in supply risk premia has come to an end, which may suggest that the market’s focus will return to structural supply risks amid a potential recovery in demand from China’s loosening Covid restrictions. In this sense, upside triggers could be brought into range heading into 2023.”
USD/CAD technical analysis
Having broken the bearish trend resistance, the price is rising along a micro trendline support with a focus into the $79.80s.