Oil prices rallied today, with WTI back above $60, on the back of a weak dollar and encouraging China trade data. Early weakness on the JNJ news was quickly brushed off as OPEC jawboned prices higher on demand hype...
“Reductions in surplus inventories as well as an expected pick-up in product demand will pave the way for a cautious recovery of oil market balance in the summer months,” the cartel said in its monthly report.
While it slightly boosted this year’s consumption forecast, it did offer some reasoning why it won't rush to resupply markets...
“The large uncertainty surrounding the fragile recovery from the unprecedented impact of Covid-19 continues to require vigilant monitoring of market developments, despite the wide-ranging stimulus measures and early signs of a return to normalcy,” it said.
Tonight's API data will give us the latest glance at that demand.
Crude -3.608mm (-2.5mm exp)
Analysts were expecting a 3rd weekly crude draw in a row and API reported a bigger than expected 3.6mm drop in stocks but Gasoline stocks surged for the second straight week...
WTI hovered around $60.40 ahead of the print and was unimpressed either way after the mixed data...
Interestingly, the Permian Basin, the U.S.’s most prolific shale patch, is expected to produce crude oil at levels not seen since the start of the pandemic in the latest sign the global economy is heating back up. Output in the basin will reach 4.466 million barrels a day in May, the most in a year, and rig counts have touched a one-year high, according to the latest data from the Energy Information Administration.