- Oil rebounds slightly after three days of losses
- WTI gains nearly 0.5% on Thursday to trade near $86/Bbl
- U.S.’s overall CPI, a measure of inflation, rose by 0.4% last month to 7.7% year on year
- The inflation data was weaker than expected and could ease the pressure on the Fed’s rate hikes
- Additionally, Equities and Treasuries extended gains by nearly 3% ahead of the data
- The USD Index (DXY – a proxy for U.S. Dollar strength against a basket of six international currencies) weakened relative to its recent highs to a four-week low
- A weaker dollar (DXY Index) can cause foreign buyers of dollar-denominated commodities to pay less for the same amount of goods
- Despite the rally this morning, there is downward pressure on prices from the recent surge in Covid cases in China
- Nearly five million people are under lockdown in China’s southern manufacturing hub Guangzhou after an uptick in cases
- Concerns about economic growth and demand disruptions continue to grow as the country upholds its strict Covid-zero policy
- The New York diesel market hints at a worsening East Coast fuel crisis (BBG)
- The premium for the spot over futures prices for diesel fuel for heating and transportation reached a new high amid historically lowest seasonal inventories
- This might be one of the factors behind the recent spike in retail diesel prices, which have risen to $5.33/Gal, the highest since July