Inflation remained at the forefront of investors’ minds as they await inflation data from Germany and a raft of employment data from the United Kingdom economy later this morning.
During the Asia session the main market movers where the energy markets and as Natural Gas prices continued to soar, while Oil price posted notable gains.
Oil made solid gains over supply concerns and the reopening of Hong Kong as COVID-19 restrictions continue to be rolled back on the Island just off mainland China.
WTI crude oil futures rallied by over 1.50% as bulls easily overcome the 74.00 level. Brent crude oil also rallied by over +1.56% towards the 80.00 level.
Oil price are basically rallying due to the potential of a prolonged outage of TC Energy Corp’s Canada-to-U.S. Keystone crude oil pipeline helped turn prices around.
Fears that Keystone may be taking longer than expected is raising the possibility of further stock draws at Cushing. Traders also worried about how long it would take to clean up and restart Keystone as14,000 barrels of oil leaked last week.
This was actually the largest US crude oil spill in nearly a decade, further underscoring why oil prices are rallying. The outage is expected to shrink supplies at the Cushing, Oklahoma storage hub, and delivery point for benchmark US crude oil futures.
Workers were said to be excavating around the 622,000 barrel-per-day at Keystone, showing just how critical and gigantic the pipeline is to North America.
COVID-19 also boosted sentiment towards oil. The Hang Seng index traded up around 1 percent on the session. Optimism about the beneficial economic impacts of reopening continues to provide a tailwind.
The government of Hong Kong said the COVID-19 contact tracing app will no longer be mandatory from Wednesday, 14 December 2022. The 3-day arrival monitoring period also abandoned.
Analysts from Bank of America expect that a successful economic reopening in China from its COVID-19 restrictions, combined with a dovish pivot by the US Federal Reserve on its interest rate increases, could boost fuel demand and propel Brent oil prices above $90 a barrel.
