Crude: Prices have started 2019 on the front foot - TDS

Analysts at TD Securities suggest that crude prices have started 2019 on the front foot, rallying over 30% from bottom to top.

Key Quotes

“Recovering risk appetite in global markets and signs of tightening fundamentals helped send crude materially higher. But, we suspect it will take time for the physical impacts of OPEC+ cuts to manifest themselves fully in the US crude inventories, and ultimately do not see a break higher to our $60/bbl target just yet.”

“Inventories should continue to build in February amid refinery maintenance, but with a likely reduction in Venezuelan imports along with the reduced Saudi imports, we will be looking for smaller than expected builds.”

“Stronger Midland differentials should also see barrels flow to the Gulf Coast rather than Cushing, supporting spreads.”