$RH PetroGas (T13.SG)$$Rex Intl (5WH.SG)$$Dyna-Mac (NO4.SG)$...
Crude prices settled up 2% Tue on heady bets that China will soon unveil numbers showing runaway demand for oil as it makes a clean break from COVID-19 curbs on its economy.
Tossed to the side again were forecasts for a 10th straight weekly build in U.S. crude stockpiles that would add to the 60 m barrels of additional inventories already reported for this year. To be fair, trade expectations for the latest build were just under half a million barrels on the average, though the actual reported number could be exponentially higher based on the trend of weekly adjustments made to the data by the EIA.
Brent crude for Apr delivery settled up 1.8% at USD83.89. WTI crude for Apr delivery also settled up 1.8% at USD77.05.
"Oil prices remain very choppy with gains today largely offsetting losses at the start of the week," said Craig Erlam, analyst at OANDA. "We may have to wait for more hard-hitting economic data next week before we see the upper or lower ranges tested as the uncertainty appears to be preventing a serious move in either direction."
Tue's rally in oil was predicated on bets that factory data scheduled to be released by Beijing on Wed - overnight Tue in the U.S. - would be appropriately higher to reflect the stronger economic activity anticipated in post-COVID China.
The so-called NBS Manufacturing PMI numbers will give investors a first blush into how China's economic reopening is faring. Forecasts so far for the Jan reading of the PMI is 50.5 versus Dec's 50.1. Separately, the Chinese Caixin Manufacturing PMI, a Chinese private sector data, is forecast to have done better with a Jan reading of 50.2 versus Dec's 49.2. Traders are using the datasets as a proxy for oil demand.
"Should the Jan data prove to be a blip, it could put pressure on the upper end of the range as longer-term economic prospects improve, while another month of hot data could necessitate much higher rates and threaten a soft-landing, weighing on demand prospects," said OANDA's Erlam. "In the interim, choppy trading looks likely to persist."
In oil inventories, market participants were also on the lookout for weekly data due after market settlement from the API. The API will release at approximately 16:30 ET (21:30 GMT) a snapshot of closing balances on U.S. crude, gasoline and distillates for the week ended Feb. 24. The numbers serve as a precursor to official inventory data on the same due from the EIA on Wed.
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