Oil prices rallied today buoyed by rising Chinese demand despite another week of larger-than-expected crude inventory builds. Chinese crude oil demand rose by nearly 1 MM/bpd in November to 15.41 MM/bpd. If this were to hold energy markets could be a lot tighter this year. Crude oil inventories were up by 8.4MM/bbls this week, the largest WoW gain since June of 2021. UBS analyst Giovanni Staunovo described the EIA data as a “bearish report, with large crude and gasoline inventory increases, but an improvement from last week, with a recovery of implied oil demand and refinery runs from the impact of Storm Elliot.” WTI traded up $.85 or 1.1% to close at $80.33. Brent traded up $1.18 or 1.4% to close at $86.16.

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