Oil prices extended gains overnight following across-the-board inventory draws reported by API, as the impact of Hurricane Ida's shut-ins combined with reports from the International Energy Agency this week that the world will have to wait until October for more supply to come online as the Organization of Petroleum Exporting Countries and its allies hike production.
“It’s bullish developments left, right and center these days,” said John Kilduff, a partner at Again Capital LLC.
“Last night’s report from the American Petroleum Institute that showed an over 5 million barrel draw in crude stocks is helping prices. We should expect more gains in prices if the EIA confirms what the API reported.”
All the bulls' eyes will be focused on the official data to confirm API's...
Crude -5.437mm (-3.5mm exp)
Crude -6.422mm (-3.5mm exp)
Following API's reported draws across all the energy complex, the official data from EIA confirmed big draws for crude, gasoline, and distillates and at the Cushing storage facility...
Overall US crude inventory (ex-SPR) is back at its lowest in two years...
US Crude production has been slow to recover from Hurricane Ida's shut-ins. According to data from the Bureau of Safety and Environmental Enforcement, shut-ins last week averaged over 1.5 million barrels per day.
WTI was trading above $72.50 ahead of the official data and extended gains after the big draws...
And while prices are surging for now, between China releasing oil from its strategic reserves (auction due on Sept 24th), there remain risks with China locking down a city of 4.5 million people to curb the spread of the virus.