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    Oil Prices Volatile as Market Adjusts to China Re-Opening, Supply Curbs, and Recession Risk


    Oil prices have been volatile over the past few weeks, as the market attempts to price in the impact of China’s re-opening, supply curbs announced by Moscow, and persistent concerns of a recession in the US. On Monday, the US Department of Energy announced plans to sell 26 million barrels of oil from the Strategic Petroleum Reserve, which is already at its lowest level in about four decades.[0]

    Yesterday, the Energy Information Administration (EIA) reported that U.S. crude inventories rose by 16.283 million barrels during the week ended Feb. 10, pushing the inventory to 471.4 million barrels, or 8% above the five year average for this time of year. Cushing, Oklahoma, a delivery hub for futures, saw a 659K barrel increase in crude inventories, while refinery crude fell by 383K barrels per day.[1] Inventories of gasoline increased by 2.3 million barrels, reaching 241.9 million, surpassing the predicted rise of 1.5 million barrels by experts.[2] Distillate inventories which account for diesel and heating oil, dropped by 1.3 million to 119.2 million, versus expectations for a 400K barrel increase.[2]

    The industry-funded American Petroleum Institute (API) reported that US commercial crude inventories expanded by 10.5 million barrels last week, according to people familiar with the figures. Data showed that there was a buildup in the reserves of gasoline and distillates.[3] West Texas Intermediate (WTI) dropped below $79 a barrel in early Asian trading after ending more than 1% lower on Tuesday.[0]

    The Organization of the Petroleum Exporting Countries (OPEC) and the International Energy Agency (IEA) have both released bullish reports this week. OPEC on Tuesday nudged up its forecast for growth in world oil demand this year by 100,000 barrels a day, bringing it to 2.3 million barrels a day.[4] Meanwhile, the IEA on Wednesday raised its 2023 global oil demand forecast by +200,000 bpd to 101.9 million bpd from a prior estimate of 101.7 million bpd, citing the reopening of China's economy.[5] China is expected to take up nearly half of 2023’s crude demand after the country relaxed most anti-COVID measures.[6]

    0. “Oil declines on U.S. requirement to sell more crude from the SPR” BNN Bloomberg, 14 Feb. 2023,

    1. “Massive Crude Build Pressures Oil Prices”, 14 Feb. 2023,

    2. “WTI drops and extends its losses below $79.00 after an increase in US oil inventories” FXStreet, 15 Feb. 2023,

    3. “Oil Slips as US Supply Build Overshadows Stronger China Outlook” Financial Post, 15 Feb. 2023,

    4. “Oil traders hit ‘sell button' with U.S. set to release more crude from its Strategic Petroleum Reserve” MarketWatch, 14 Feb. 2023,

    5. “Crude Falls On Dollar Strength And Surge In EIA Crude Inventories” Barchart, 15 Feb. 2023,

    6. “Oil prices rise as demand hopes offset bumper U.S. inventory build By”, 16 Feb. 2023,

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