The price of Brent crude oil has risen by $2/b from yesterday morning and is now trading at $88.5/b, despite the further decline in US equity markets. The prompt time spread (m1-m2) is clearly widening and has even risen above $1/b, a sign of great tension in the market in the short term in addition to fears linked to tensions between NATO and Russia over Ukraine.
API estimates suggest a further decline in US crude stocks last week (-875kb/d), as well as a drop in diesel stocks (-2.2mb) linked to heating demand and heavy freight traffic. Gasoline stocks are reportedly up (+2.4mb). The US administration released another 13.4mb of strategic reserves yesterday in order to increase gasoline production and lower its price. The weekly EIA statistics will be released as usual at 4.30 pm CET today.
Demand for petroleum products is strong in Asia as well at the moment, with an expected 36% increase over 2021 of trips in China for the Lunar New Year holiday. Demand is expected to ease in February as industrial activity is likely to be moderated to mitigate pollution around the Olympic Games.
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