WTI Extends Gains After Surprise Crude Draw, Despite Huge Gasoline Build
Oil prices soared today after reassuring comments from Fed Chair Powell built on growing confidence in China's reopening (as Aramco increased its selling prices for shipments to Asia) and that was all helped by a weaker dollar. Additionally, the devastating earthquake on Monday that left thousands dead in Turkey and Syria also led to a halt in operations at Turkey's Ceyhan oil export terminal, with has a capacity of 1 million barrels a day.
“In the grand scheme, essentially you have contrasting forces of rising inventories and a bullish outlook on demand,” said Daniel Ghali, a commodity strategist at TD Securities.
The last few weeks have seen some rather shocking series of inventory builds across crude and the products - not exactly reassuring for the demand picture (even if some of it was affected by the nationwaide deep freeze).
Crude -2.184mm (+2.1mm exp)
Gasoline +5.261mm (+1.6mm exp) - biggest build since July 2022
Distillates +1.109mm (+100k exp)
Crude inventories drew down for the first time in 7 weeks but markets were a little shocked by the biggest gasoline product build since July 2022...
WTI was trading just below $77.25 ahead of the API print and extended gains very modestly on the mixed inventory data...
"The price of the barrel is finding support as the reopening of the Chinese economy, following the end of the zero-COVID policy, is expected to drive a significant increase in demand for crude this year," said Ricardo Evangelista, senior analyst at ActivTrades, in a note.
"At the same time, the earthquake in Turkey forced the shutting down of a major export terminal, responsible for 1 million barrels per day, exacerbating supply side pressures and contributing to increases in oil prices," he said.