More optimism on re-opening demand and following a Genscape report on Cushing stocks, oil prices have exploded higher in recent days, especially that front-month WTI contract (and Brent tags $30)...
President Trump tweeted his enthusiasm for higher gas prices this morning:
“Oil prices moving up nicely as demand begins again!”
The discount on crude for June delivery relative to July, a structure known as contango, tightened to its narrowest in more than a month, indicating that concerns about oversupply may be easing.
“The primary issue is that there is less fear of a storage crisis, and there is also an anticipation that production is going to start to fall pretty quickly,” said Bill O’Grady, chief market strategist at Confluence Investment Management LLC.
Pushing WTI to $25 - a key technical support for now...
But all super illiquid and super sensitive eyes will now be on inventory data for the next leg...
Crude +8.44mm (+7.1mm exp)
Gasoline -2.237mm (-400k exp)
Distillates +6.143mm (+3.5mm exp)
This is the 15th weekly rise in crude stocks (and bigger than expected) as Cushing stocks also rose, closer to max'd out...
WTI was hovering around $24.50 ahead of the API print and pushed up to $25 after the data...now up 23% on the day!
“Certainly some of the restarts globally are helping,” said Andrew Lebow, senior partner at Commodity Research Group.
“We’ll be well below where demand should be this time of year, but nevertheless, for the time being, the worst on the demand side has probably passed.”