WTI crude extended recent gains, hovering around $60 - setting the stage for its best quarter since 2002 - ahead of the API inventory report that was expected to show a draw after three draws in the last four weeks.

“We’re back in rally mode,” said John Kilduff, partner at Again Capital LLC, a New York hedge fund focused on energy.

“We’re seeing a steady supply decline that’s getting us back to $60 and everyone is trying to figure out the fallout from the refinery snags in Houston and the disruption in the Houston Ship Channel.”

API

• Crude +1.93mm (-3mm exp)
• Cushing +688k (+300k exp)
• Gasoline -3.469mm (-3mm exp) - 5th draw in a row
• Distillates -4.278mm (-500k exp)

Amid disruptions to refiners along the Houston Ship Channel, expectations for a 4th draw in 5 weeks were dashed as API reported a 1.93mm build...

(Click on image to enlarge)

However, the notable draws in the product side took the bearish slant of price reaction

“The second wave of the U.S. shale revolution is coming,” said Fatih Birol, the head of the International Energy Agency.

“This will shake up international oil and gas trade flows, with profound implications for geopolitics.”

WTI was hovering at $60 ahead of the API print and dropped as the data disappointed...

(Click on image to enlarge)

“The expectation is very much that OPEC+ will stick to its 1.2 million barrel a day reduction plan for as long as one would expect for that market to come into balance,” said Bart Melek, head of global commodity strategy at TD Securities in Toronto.