WTI Bounces Above $48 After 3rd Weekly Crude Draw In A Row

surprise crude build from API sent WTI briefly lower but as the dollar has tumbled this morning, crude prices have rallied back above $47.50, helped by optimistic jawboning from Saudi Arabian Energy Minister Khalid Al-Falih.

“We will meet in April and I’m certain that we will extend it,” Al-Falih told reporters in Riyadh, referring to the next meeting of OPEC+ members to discuss whether to extend the December agreement to reduce output. “We need more time to achieve the result.”

Additionally, Al-Falih said the current price dip isn’t based on supply and demand of oil and has plenty of blame to go around:

“What has happened in my opinion recently is a confluence of many non-oil fundamental issues including the geopolitical issues, especially around the sanctions and the waivers that were granted by the United States,” Al-Falih said.

“It also includes the trade tension between the U.S. and China.”

But for now, inventories are what is driving price action.

API

  • Crude +3.45mm (-3.25mm exp)

  • Cushing +1.063mm (+1.3mm exp)

  • Gasoline +1.76mm

  • Distillates -3.442mm

DOE

  • Crude -497k (-3.25mm exp)

  • Cushing +1.091mm (+1.3mm exp)

  • Gasoline +1.766mm

  • Distillates -4.237mm - biggest draw since March

After two weekly draws, last night's build from API surprised traders, and DOE reported only a small crude draw of 497k (well below the 3.25mm draw expected). Distillates saw the biggest draw since March

Crude production is unchanged on the week.

WTI remains well below $50 still...

“The market is experiencing price carnage, maximum pain and considerable downside pressure,”technical analyst Robin Bieber said in a report for PVM Oil Associates. The space between the flat price and the 5-day MA is unsustainable and “begs for a temporary ‘cooling off’ reaction higher to relieve some of the recent pressure.”

Still, the market is “weak and very exposed to lower numbers”

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