Flip-flopping headlines from OPEC+ leaks and China COVID restrictions prompted a volatile day in crude markets today but WTI ended higher.
OPEC+ does “not like contango and that is what has raised market expectations of deeper cuts,” Amrita Sen, chief oil analyst at consultant Energy Aspects, said in a Bloomberg TV interview.
“I’m not ruling out deeper cuts -- that’s of course on the table -- but I would say that’s not our base case.”
Earlier in the session, prices rallied above $79 a barrel after Beijing said it would bolster vaccination among seniors then prices briefly flirted with losses after Reuters reported that the production cartel would stick with its current oil-output policy
Crude -7.85mm (-2.49mm exp) - biggest draw since April 2022
This is the 3rd sizable crude draw in a row...and the 3rd straight week of sizable product builds...
WTI was hovering around $78.50 ahead of the API print and extended gains after...
Notably, the shape of the futures curve has flipped in recent weeks, continuing to signal an oversupplied market.
That is the largest contango since 2020.