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.
Oil prices are still enjoying the wash of last week's very decent performance as the notion of initial tighter supplies from Russia due to sanctions introduced by the European Union and the likely joining of them from the US which itself, under a Donald Trump tutelage, will be far more hawkish toward Iran. The main futures contracts in their M1 contracts finished the week; WTI +$4.09/barrel (+6.09%), Brent +$3.37/barrel (+4.74%), Heating Oil +13.74c/gallon (+6.44%), RBOB +9.56c/gallon (+5.02%) and Gasoil +$41.50/tonne (+6.41%).
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