Oil prices ended higher today as stimulus hopes ebbed and flowed - more flowing than ebbing into the close - and the massive explosion in Beirut sparked fears of yet more instability in the region.
“Tensions are high and that just kind of puts a fine point on it,” said John Kilduff, a partner at Again Capital LLC. “Looks like there’s gonna be a draw in crude oil again, so we got that support as well.”
But after last week's big surprise crude draw, analysts are expecting another significant draw...
Crude -8.587mm (-3.35mm exp)
Gasoline -1.748mm (-1.3mm exp)
Distillates +3.824mm (+100k exp)
And for the second week in a row, crude saw a major inventory draw (and bigger than expected gasoline draw). Distillates continue to build however as flying habits (among other things) remain subdued to say the least...
WTI was hovering around $41.50 ahead of the API data and modestly extended gains after the print...
Ahead of tomorrow's official EIA data, "oil again rejected the sub-$40-a-barrel area as talk starts to circulate that we could see a significant draw down in U.S. crude oil inventory," said Phil Flynn, analyst at Price Futures Group, in a note.
"The whisper numbers are becoming louder as a historic drop in U.S. oil production, as well as a plunge in U.S. oil imports, could set the stage for another historical crude oil supply draw."