Oil prices continued their decline this morning - to one-month lows - after ugly European and US PMIs added more fuel to the fire of slowing global demand fears that were stoked by China's disappointing data last week, all of which adds up with last night's API report showed a surprise gasoline inventory build, suggesting end-product demand lagging.

Adding to bearish sentiment, observed exports from Iran have surged to 2.2 million barrels a day this month. Meanwhile, Turkey and Iraq have held a flurry of talks as they seek to restart a major oil pipeline, though they have failed to reach a breakthrough so far.

API

• Crude-2.4mm(-2.9mm exp)
• Cushing -2.21mm
• Gasoline +1.9mm (-500k exp)
• Distillates -150k (+200k exp)

DOE

• Crude -6.134mm (-2.9mm exp)
• Cushing -3.13mm - biggest draw since Oct 2021
• Gasoline +1.468mm (-500k exp)
• Distillates +945k (+200k exp)

Product stocks unexpectedly grew last week but inventories at the Cushing hub plunged by the most since October 2021. Crude stocks drew down 6.1mm barrels - more than double expectations....

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Source: Bloomberg

Cushing stocks are at their lowest since Jan 2023...

Source: Bloomberg

The Biden admin 'refilled' the SPR for the 3rd week running - adding 594k barrels...

Source: Bloomberg

Despite the ongoing decline in rig counts, US crude production remains near pre-COVID-lockdown levels...

Source: Bloomberg

WTI was trading just below $79 ahead of the official data - at one month lows...

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And rebounded modestly on the big crude draw...

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All that said, Bloomberg reports that global oil inventories, already near a six-year seasonal low, slumped sharply over the past month as OPEC+ production cuts and resurgent demand start to affect the supply of crude.

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Global onshore stockpiles were seen at about 3.37 billion barrels as of Wednesday, a slump of about about 60 million barrels from a month earlier, according to energy analytics firm Kpler. They have recovered somewhat since Aug. 15.

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