The oil market has at last experienced a seasonal demand indicator as seen in the Distillate draw in the US EIA Inventory Report. Stocks of the middle barrel product reduced by 3.2mb against a build expectation of 0.7mb. However, what brings seasonal cheer is at the current 4.5mbpd demand, it is the highest since early 2022.
Oil prices ought to see more of a reaction to the Crude inventory draw seen in the API data overnight. The feedstock saw a decline of 4.7mb against an expectation of -1.6mb. In addition, the implementation yesterday of the new sanctions by the EU on Russian shipping and the UK targeting a particular company should again give more buoyancy.
Despite the revelation this morning from Reuters that China is prepared to increase its budget deficit to 4% of GDP in defensive of not only the 5% GDP growth target next year but probable trade war with the USA, it cannot cover the lack of spending that remains a stubborn attribute of its populace. A point well made by Reuters is that such legislation is not announced until a parliament sitting in March giving time for plans to be changed or watered down, a thought that is the right of cynics given the mouthing of much and delivering of little in the recent steps deployed by China to befuddle markets.
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