Oil prices extended their recent gains (WTI bouncing back near $68 after 7 straight down days), buoyed by signs the spread of the delta variant may be abating in China (and helpful comments from Beijing that they will support demand in the economy).
"Concerns are easing that we will not see a global shutdown due to the Delta variant," said Gary Cunningham, director of market research at Tradition Energy in Stamford, Connecticut.
Additionally, a fire on an oil platform in Mexico knocked around a quarter of that nation's daily crude output offline, contributing to oil's gains.
"The market is getting a tailwind from the PEMEX fire, which has greenlighted this rally," said Bob Yawger, director of energy futures at Mizuho in New York.
All eyes will likely be on the Gasoline numbers to get a sense of Delta's impact on demand once again.
Crude -1.622mm (-3.2mm exp)
Gasoline -985k (-1.5mm exp)
Distillates -245k (-400k exp)
Analysts expected the renewed trend of drawdowns in crude stocks continued last week and were correct, albeit a modest 1.622mm barrel drop in stocks (around half the expected draw). Gasoline and Distillates both saw draws also...
WTI was hovering around $67.60 ahead of the API print and was steady after...
Finally, it is worth noting that the U.S. Department of Energy on Monday said it would sell up to 20 million barrels of crude from the Strategic Petroleum Reserve (SPR) oil stocks to comply with legislation, with deliveries to take place between Oct. 1 and Dec. 15.