WTI Plunges To $50 Handle After Crude Stocks Hit 2-Year Highs

Update: It appears the unexpected surge in crude inventories (glut) is trumping any claims from OPEC (or more specifically the Saudis) that supply can be tamped down to match lower demand concerns. WTI has plunged back to last week's lows (a $50 handle), near its lowest since early Jan 2019...

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Oil prices extended their losses overnight after API surprised with notable builds in crude and gasoline (and at Cushing) - sending WTI to a $51 handle - and not helped as US-China tensions show no sign of abatement.

“U.S. crude stocks have been rising almost uninterrupted since mid-March,” said Bjarne Schieldrop, Oslo-based chief commodities analyst at SEB AB.

API

  • Crude +4.85mm (-1.0mm exp)

  • Cushing +2.4mm (+1.97mm exp)

  • Gasoline +830k (+700k exp)

  • Distillates -3.5mm (+1.1mm exp)

DOE

  • Crude +2.21mm (-1.0mm exp)

  • Cushing +2.096mm (+1.97mm exp)

  • Gasoline +764k (+700k exp)

  • Distillates -1.0mm (+1.1mm exp)

After last week's biggest US aggregate energy inventory build in history, hope was for some draws this week but once again that hope was dashed as EIA reported builds in Crude and Gasoline stocks (and at Cushing).

U.S. crude stockpiles rose to the highest since July 2017 as oil production hovered near record highs.

 

US Crude production reached a new record high the prior week, but the turn down in rig counts suggests that peak production is imminent.

WTI traded around $52 the figure ahead of the EIA data (having bounced from intraday lows in the European session) but pushed back towards the lows after the crude build...

Finally, Bloomberg Intelligence's Senior Energy Analyst Vince Piazza sums up the current energy complex situation: Potentially slowing global demand and trade disputes underpins our reserved oil-price view. Deepening output curbs is the right strategy for OPEC and its partners, yet Russia's commitment is in question. U.S. output growth is resilient but would diminish if WTI spent a prolonged period below $50.