WTI Extends Gains After Surprise Crude Draw

Oil price rebounded after three days lower after a report that OPEC sees a potential reduction in supply from outside of the group.

When the OPEC news hit the market, prices “started to rally from the red to the green,” said Bob Yawger, future divisions director for Mizuho Securities in New York. “Until this turnaround, things were getting ugly.”

And now all eyes are on inventories...

API

  • Crude -0.5mm (+1.5mm exp)
  • Cushing -1.2mm
  • Gasoline +2.3mm
  • Distillates +0.8mm

A surprise crude draw and the end of the streak of Cushing builds corresponds with an end to the streak of draws in products...

(Click on image to enlarge)

Source: Bloomberg

WTI had rallied on the day and hovered around $57.25 before the data. Once API reported the surprise draw, WTI jumped higher...

(Click on image to enlarge)

“The market is digesting chairman Powell’s speech,” said John Kilduff, partner at Again Capital in New York. “This is a bit of positive pull up from Powell, it’s the fact that the Fed is going to be on hold because the economic outlook is looking brighter and is a key aspect to the energy market these days because of the focus on the demand.”

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