Oil prices surged along with everything else (and a falling dollar) as Powell managed to say nothing.
Powell’s remarks were a “a touch more dovish than what was implied in the recent minutes and suggested by other Fed speakers in the last few days,” said Vital Knowledge founder Adam Crisafulli.
But for the next leg, all eyes will be on inventories.
“Storage has been down for weeks on end and as long as that continues, the market is going to continue to bid,” said Bob Yawger, director of the futures division at Mizuho Securities USA.
“If stockpiles post a big draw, then we will be at the lowest level since 2018,” which would justify WTI trading between $75 and $85 a barrel, he added.
After last week's huge product builds, hope is that demand is coming back, despite increasing anxiety over Omicron.
Crude -1.1077mm (-1.85mm exp)
Crude stocks fell for the 7th straight week if API's report is confirmed by official data tomorrow, but crude's draw was smaller than expected and Gasoline stocks saw a major, worrying-for-the-bulls build. We suspect this big product build is API catch up to last week's official data.
WTI hovered around $81.50 ahead of the API print and dipped after the smaller than expected crude draw...
Oil has made a positive start to 2022 on expectations that demand will continue to expand as the impact of the pandemic on fuel consumption gradually eases, tightening the market. In the past few weeks, crude supplies from OPEC+ member nations Kazakhstan and Libya have been disrupted.