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WTI Holds Day's Gains After API Reports Bigger Than Expected Crude Build

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by Tyler Durden
Tuesday, Aug 08, 2023 - 08:37 PM

After some early weakness - after China's dismal trade data - oil prices surged back higher after Ukrainian President Zelensky said his country would retaliate if Russia continues to block Ukrainian ports.

Oil trading centered on a "heavyweight battle playing out in global energy markets today between China demand destruction versus Saudi supply cuts," said Robert Yawger, executive director for energy futures at Mizuho Securities, in a note.

After the largest crude inventory decline ever last week, analysts expect a very modest build this week

API

  • Crude +4.067mm (+1.3mm exp)

  • Cushing -112k

  • Gasoline -413k (-300k exp)

  • Distillates -2.093mm (+200k exp)

API reports a bigger than expected crude build (after last week's collapse). Stocks at the Cushing hib fell for the sixth straight week. Distillates saw a much larger than expected inventory draw...

Source: Bloomberg

WTI was hovering just below $83 ahead of the API print and drifted modestly lower after...

"Amid a steady rally dating back to late June, fundamentals continue to skew supportive," said Robbie Fraser, manager of global research and analytics at Schneider Electric, in a note.

Despite the rally, a weakening demand outlook is limiting the gains. The US Energy Information Administration on Tuesday lowered its forecast for US consumption. Reports from OPEC and the International Energy Agency coming later this week will offer further updates on the health of the market.

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