Oil prices extended gains this morning on the back of hopes for 1.2mm b/d production cut from OPEC+ (and entirely dismissing reports that Russia is against the idea), after a smaller than expected API crude build last night.
“In terms of fundamentals the numbers are being changed very quickly,” says Olivier Jakob, managing director of Petromatrix GmbH.
“It’s going to be about OPEC and the reaction to that. There’s a lot of uncertainty.”
For now we focus on the official inventory data.
Crude +1.69mm (+3mm exp)
Gasoline -3.9mm (-1.87mm exp)
Distillates -1.7mm (-2mm exp)
Crude +784k (+3mm exp)
Cushing -1.971mm - biggest draw since Dec 2019
Gasoline -4.339mm (-1.87mm exp) - biggest draw since April 2019
Distillates -4.008mm (-2mm exp) - biggest draw since March 2019
The sixth weekly crude build in a row (though considerably less than expected) was offset by huge product draws...
Total crude and product stockpiles were drawn down 11.9 million barrels, the most since June. Big draws in gasoline, distillate and propane/propylene pulled down the total as seasonal refinery maintenance picked up.
US Crude production increased to a new record high...This is even as producers are widely expecting demand destruction from the coronavirus.
WTI was trading just above $48 ahead of the DOE print, and held their after the data hit...
The crude price reaction is muted, despite the smaller than expected build and big gasoline and distillate draws. Maybe all eyes are on the OPEC meeting; prices were already up this morning.