- Macro worries return as China is seeing a surge in COVID case counts.
- For the oil market, China's COVID worries will hit both the demand side and supply side.
- But despite the headline worries, China's crude inventory is declining along with the rest of the world.
- Product margins are supportive and moving higher, indicating there are no demand issues. And with Brent-WTI widening again, this will be a tailwind for the US oil market.
- All-in-all, so long as global inventories continue to decline, we are moving in the right direction.
For further details see:
Oil Prices Fall On COVID Fears In China, But Crude Inventories Continue To Fall