Image Source: Pixabay

Oil plunged again today, on pace for its longest weekly losing streak since 2018, after inflation data prompted some fears that The Fed will not be cutting rates as soon as many hoped.

Traders are worried that the Fed does not have inflation under control and will have to keep the foot on the accelerator when it comes to interest rates, said Phil Flynn, an analyst with the Price Futures Group.

The oil market shrugged off reports from The BBC that Yemeni's Iran-backed Houthi rebels hit a Norwegian tanker with at least one missile, leading to a fire.

"Add a drop off in China's crude imports to 5-month lows to our current lull in refined products demand, we're seeing an increasingly well-supplied crude market," said StoneX's Kansas City energy team.

Will another crude draw trigger buying ahead of OPEC publishing what is likely another strong forecast in its monthly report tomorrow.

API

• Crude -2.35mm (-1.2mm exp)
• Cushing +1.4mm
• Gasoline +5.8mm (+1.9mm exp)
• Distillates +300k (+400k exp)

Crude inventories declined for the second week in a row with a 2.35mm drawdown (double the expected draw). However, gasoline stocks soared higher and Cushing stockpiles rose for the 8th straight week...

(Click on image to enlarge)

Source: Bloomberg

WTI was hovering around $68.75 ahead of the API print and barely bounced on the crude draw...

(Click on image to enlarge)

Oil demand next year is expected to be about 1 million bpd less than supply growth, according Daniel Yergin, vice chairman of S&P Global.

"As long as supply and demand dominate you're going to have that downward pressure on price," Yergin told CNBC's "Squawk Box" on Monday.

Oil prices are falling as record production in the U.S., Canada and Brazil collide with a weakening economy in China, raising concerns among traders that the market is oversupplied.

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