Despite sliding after last night's API-reported big Crude and Cushing build, WTI has rebounded overnight amid a post-midterms tumbling dollar, but a larger crude build than expected from DOE, combined with a smaller gasoline draw, could lead to WTI “set to test $60 easily,” Tariq Zahir, a commodity fund manager at Tyche Capital Advisors, says
Additionally, Oil rose on the back of headlines that OPEC and its allies were said to plan talks on fresh production cuts next year, responding to recent increases in crude inventories amid surging U.S. supply.
“The Saudis want to stop the price decay,” said Giovanni Staunovo, an analyst at UBS Group AG in Zurich.
“There are many moving variables until the OPEC meeting in December, like Iran and U.S. production growth. But as the Saudis say they aim for market stability, if the data suggests an oversupplied market next year the probability of a cut is high.”
However, as Bloomberg notes, if OPEC, led by Saudi Arabia, does ultimately decide fresh cutbacks are necessary, it will confront a number of challenges. It will need to once again secure the support of rival-turned-partner Russia, which has less need for high oil prices. There’s also the risk of antagonizing the kingdom’s key geopolitical ally, President Trump.
Crude +7.831mm (+2mm exp)
Cushing +3.073mm (+2.1mm exp)
Crude +5.78mm (+2mm exp)
Cushing +2.419mm (+2.1mm exp)
Gasoline +1.85mm (-1.7mm exp)
Crude and Cushing inventories rose for the seventh straight week (considerably more than expected) and a surprise gasoline build, sent WTI prices back below pre-API levels from last night and back to a $61 handle...
And as inventories rose, production surged a huge 400k b/d to a new record high...
WTI's overnight gains sagged back to pre-API levels ahead of the DOE print and dropped below it as the data confirmed the builds...
And finally, Bloomberg's Javier Blas highlights perfectly why oil prices are sliding...