Oil prices slipped today, despite a lower dollar, as growing concerns over the COVID variants trumped any vaccine-hyped return-to-normal hope. Critically, In China, a coronavirus flare-up is threatening fuel demand during the Lunar New Year period, with the government encouraging millions not to travel.
"There’s a lot of demand destruction-type events in the market, and it’s weighing on crude,” said Bob Yawger, head of the futures division at Mizuho Securities.
The market is “giving the impression we’re running out of momentum here.”
Once again all eyes back on stocks to see just how the supply/demand picture is shifting, despite the constant propaganda on both sides..
Crude -5.272mm (-1.7mm exp)
Gasoline +3.058mm (+1.2mm exp)
Another big draw in Cushing stocks and a surprisingly large crude draw surprised traders, and was enough to offset the product builds...
WTI hovered around $52.50 ahead of the data and popped back into the green for the day on the print...
“The fundamental oil picture is firmer for mid-year, but it’s not really that tight” compared to other years, said Rick Joswick, head of oil pricing analytics at S&P Global Platts. The risk that shale producers may eventually increase production also “puts a cap on the back-end of the forward price curve.”