Oil prices rebounded from a two-week low Tuesday as Saudi Arabia pledged to deepen production cuts and U.S. President Donald Trump said he could extend a deadline for new tariffs on China. However, after tagging $54, WTI slid back lower to hover around $53 ahead of tonight's API inventory data.

An inventory build will lead market to believe "unwinding of inventories isn’t happening as quickly as they would like despite lower imports of Saudi crude into U.S. and recent sub-par growth of shale production," said Bart Melek, head of global commodity strategy at TD Securities in Toronto.

API

• Crude -998k (+2.4mm exp)
• Cushing -502k (+1.4mm exp)
• Gasoline +746k (+1.2mm exp)
• Distillates -2.48mm (-1.7mm exp)

Expectations were for further inventory builds in crude and Cushing but both saw surprise draws (crude -998k vs +2.4mm exp) and distillates also saw a notably bigger than expected draw. WTI rebounded from its late-day drift lower...

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“OPEC’s overall production being down has refocused the market’s expectations around tightened supply," said Gene McGillian, a senior analyst and broker at Tradition Energy in Stamford, Connecticut. “Whether or not we have enough strength to make a return to recent heights of $55 remains the question."

WTI drifted lower to $53 ahead of API then knee-jerked higher on the surprise draw...

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Jawboning is all they have left:

“As if on cue, Saudi Arabia’s energy minister has injected a hearty dose of bullish impetus into the energy complex,” analysts at PVM Oil Associates Ltd. said in a report.