WTI Jumps Above $52 After Huge Crude Draw

WTI prices rebounded today on renewed optimism that announced production cuts from the OPEC+ coalition will re-balance global markets and was helped by the fact that Libya’s biggest field remained shut, taking supply offline.

"The Russians committing to the cut and putting a number out, even though it was relatively small, allowed the markets to rally", said Bob Yawger, director of futures at Mizuho Securities USA.

"Once the rally started, there were still lots of people still short so it flushed a lot of them out".

However, not everyone's buying it:

“There’s the U.S.-China trade war, France, Italy, Brexit: these things just do not bode well for either regional or global oil demand”, PVM Oil Associates analyst Tamas Varga said by phone.

API

  • Crude -10.18mm - biggest draw since July
  • Cushing +642k
  • Gasoline -2.48mm
  • Distillates +712k

After last week's shock surprise crude draw (the biggest in 5 months) ending a 10-week string of builds, API reports a massive 10.18mm crud draw (catch down to DOE?), the biggest since July.

(Click on image to enlarge)

WTI traded around $51.75 ahead of the API data having rallied during the day (as the dollar faded back from its spike) and jumped back above $52 after the bid draw...

(Click on image to enlarge)

On a side note, the US government left its forecast for domestic crude production unchanged for 2019 even with prices averaging almost $11 a barrel lower than its previous estimate.

Overall, “compared to early last week, the outcome was rather disappointing, the whole process wasn’t convincing, and it’s still uncertain whether they will actually cut,” says ABN Amro senior energy economist Hans van Cleef.

And if you need a bullish close, since they cut production Western Canada Select is up 200%...

(Click on image to enlarge)

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