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WTI Fails To Extend Gains Despite Huge Crude Draw

Courtesy of ZeroHedge. View original post here.

Oil prices have extended their gains overnight after the much bigger than expected crude draw suggested by API, and helped by an uber-dovish Powell and a re-emergence of tensions with Iran (Trump threatening more sanctions imminently).

“The crude draws reported by the API yesterday were much larger than the market was expecting,” said Warren Patterson, a senior commodities strategist at ING Bank NV. “That is the key catalyst behind the move higher.”

API

  • Crude -8.129mm (-2.5mm exp)

  • Cushing -754k

  • Gasoline -257k

  • Distillates +3.690mm

DOE

  • Crude -9.50mm (-2.9mm exp)

  • Cushing -310k

  • Gasoline -1.46mm

  • Distillates +3.729mm

After API, and the market's surge, analysts shifted their expectation for a bigger crude draw than before, and rightly so as DOE reported a massive 9.50mm crude draw – the fourth weekly draw in a row. Gasoline also drew for the 4th week as distillate stocks rose.

Production is perhaps rolling over but its a little too soon to tell yet (aside from the signaling from rig counts)…

WTI traded around $59.50 ahead of the DOE data (having surge overnight), spiked on the big crude draw print before algos sold the news…

“The declining American inventories and Iran’s warmongering rhetoric pave the road further for bulls to make a comeback,” said Howie Lee, an economist at Oversea-Chinese Banking Corp. in Singapore.

“But it promises to be a bumpy road ahead as there’s still a lot of concern about declining energy demand.”


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