9.3 C
New York
Thursday, March 28, 2024

WTI Extends Gains After Large Surprise Crude Draw

Courtesy of ZeroHedge View original post here.

Oil prices were higher on a choppy day as WTI June rolled into July as traders weighed supply cuts and a demand rebound against an ominous economic outlook from the Fed.

On the bright side…

“The demand side has come off the low, the supply side is still falling,” said Peter McNally, global lead for industrials, materials and energy at Third Bridge.

“That has led to this bounce back in the prices.”

However, reality is still a concern…

“People are still locked down and there are still a lot of people without jobs right now,” said Tariq Zahir commodity fund manager at New York-based Tyche Capital Advisors LLC.

“It’s really going to fall on the next two weeks of seeing if these states that have opened up, is there going to be an increase in cases.”

And so tonight's API inventory data will be keenly watched for any continuatiojn of last week's surprise draws, or a switch back to builds…

API

  • Crude -4.8mm (+2.4mm exp) – biggest draw since 12/29

  • Cushing -5.0mm – a record draw

  • Gasoline -651k (-3.5mm exp)

  • Distillates +5.1mm (+3.2mm exp)

After 15 straight weekly builds, crude stocks drew down very modestly in the prior week, but last week saw a notable 4.8mm barrel drawdown – the biggest draw since 2019… (and a record 5mm drop in Cushing stocks)

Source: Bloomberg

Crude-oil production from seven major U.S. shale plays is forecast to decline by 197,000 barrels a day in June to 7.822 million barrels a day, according to a report from the Energy Information Administration

July WTI hovered around $31.75 ahead of the API print, and extended gains for day after the data hit…

“There’s a lot of optimism baked in here,” said Paul Horsnell, head of commodities research at Standard Chartered Bank. “The market has balanced by supply coming off faster than expected.”

Subscribe
Notify of
0 Comments
Inline Feedbacks
View all comments

Stay Connected

157,452FansLike
396,312FollowersFollow
2,280SubscribersSubscribe

Latest Articles

0
Would love your thoughts, please comment.x
()
x