Oil prices inched lower today as concerns over US recession fears (and China lockdowns) battled Washington rhetoric as the US energy secretary said the Biden admin has not ruled out export restrictions to lower fuel prices.
"The oil market remains caught between fears of recession and the consequences of the zero-Covid policy in China on the one hand, and tight supply, especially of oil products, coupled with the prospect of US gasoline demand picking up during the summer driving season on the other," Commerzbank analyst Carsten Fritsch said in a note.
Prices were also held down by news that the DOE was offering to sell up to 40.1 million barrels of crude as part of President Biden’s March announcement to release in stages one million barrels of oil per day for six months.
“Movements in oil have become more subdued,” said Alex Kuptsikevich, senior market analyst at FxPro.
“It will take a meaningful, bullish driver for quotes to manage to consolidate above this area this time.”
However, any signals of demand destruction in the inventory data could change that 'subdued' nature quickly.
A smaller than expected crude build and a large gasoline draw dominated the API report. This will be the 8th straight weekly drop in gasoline stocks…
WTI slipped back below $110 ahead of the API data, then spiked higher
Notably Jet Fuel and Diesel prices have tumbled recently (the chart below shows per barrel equivalents) as refiners focused their attention on the higher margin cracks.
Is it gasoline's turn next?