Oil prices ended flat on the day, bouncing back above $41 (after weak retail sales) on the back of OPEC+ headlines:
“All participating countries need to be vigilant, proactive and be prepared to act, when necessary, to the requirements of the market,” the panel said in its closing statement after Tuesday’s video conference.
Saudi Energy Minister Prince Abdulaziz bin Salman said he could see a light at the end of the tunnel, but the market had some way to go before getting there (and we worry that is the oncoming train of global lockdowns crushing demand once again).
“There is still a way to go before we reach the other side of the long-awaited pandemic tunnel,” Prince Abdulaziz said at the opening session of the OPEC+ Joint Ministerial Monitoring Committee’s virtual meeting.
“The good news was counterbalanced by a surge in cases in the second wave of infections” and a rush of additional supply from Libya.
But for now, the algos will focus on short-term inventories...
Crude +4.174mm (+100k exp)
Gasoline +256k (+300k exp)
Distillates -5.024mm (-1.8mm exp)
After the prior week's surprise crude build, analysts expected a very small rise in stocks in the last week (and a small build in gasoline stocks). However, crude stocks rose 4.174mm barrels (notably more than the 100k bump expected)...
“There’s the overhanging doom and gloom of a Covid resurgence and growing concerns about a long-term impact on jet fuel demand,” said Gary Cunningham, director of account management and research at Tradition Energy.
“All of it is going to affect overall global consumer demand and that’s a big hit on the economy and a big hit on outlooks for petroleum demand.”
WTI bounced back above $41 intraday, hovering around $41.40 ahead of the API print, and slipped lower after the data...
“The market always likes to see definitive statements on cuts to have a clear idea of what road that is and not getting that just means more uncertainty,” said Bill O’Grady, executive vice president at Confluence Investment Management in St. Louis.