Yesterday's release by the US Energy Information Administration (EIA) showed crude oil stockpiles increased by 16.3 million barrels in the week ended February 10. The inventory now stands at 471.4 million barrels, which is around "8% above the five year average for this time of year". 
A day earlier, the International Energy Agency (IEA) had releases its latest monthly report, upgrading again the demand outlook for 2023. It now expects global oil demand to rise by 2 million barrels/day (from 1.9 previously), fueled by a "resurgent" China, which accounts for nearly half of the 2 mb/d projected increase this year. 
China had been implementing a zero-Covid policy, which stifled economic activity and led to a decline in domestic oil and gas consumption in 2022, for "the first time since forty years" according to IEA's chief Faith Birol. 
However, the world's second largest economy and biggest importer of oil, shifted away from those strict containment policies late last year, creating optimism around its economic growth and oil demand. The International Monetary Fund (IMF) raised its forecast last month, now expecting China's GDP to grow by 5.2% this year, from 4.4% in the previous projection and the 3% of 2022. 
USOil was pressured on Wednesday after the aforementioned built-up in US inventories, but higher projected oil demand for 2023 due to China's reopening, as well as the 500,000 production cut announced by Russia last week, are supportive.
The technical outlook has not changed much as the commodity continues to hover around the EMA200. It has the ability to push for new year highs towards 84.70, but does not inspire confidence for more at this stage.
Despite optimism around China markets also contemplate a hawkish Fed and now expect a higher terminal rate and monitor the deterioration in US-China relations, due to the "flying objects" saga. USOil has repeatedly failed to stay above the 38.2% Fibonacci of the November high/December low drop. It remains vulnerable to the broader 72.23-70.06 region, but sustained weakness below these levels does not look easy.
Senior Financial Editorial Writer
Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.
With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.
Retrieved 16 Feb 2023 https://ir.eia.gov/wpsr/wpsrsummary.pdf
Retrieved 16 Feb 2023 https://www.iea.org/reports/oil-market-report-february-2023
Retrieved 16 Feb 2023 https://www.youtube.com/watch