WTI traders shrugged off API's surprise crude build overnight, breaking back above $70 ahead of DoE data, and extending gains as crude and gasoline inventories drewdown and Cushing stocks dropped again.

Despite expectations for a draw, a crude build is more seasonally normal as we enter refinery maintenance season, yet we are still seeing high utilization rates, according to James Williams, president of energy researcher WTRG Economics.

Bloomberg Intelligence Senior Energy Analyst Vince Piazza warns that while oil inventories are expected to show a decline in the latest week, concerns about oversupply are mounting.

API Crude +1.25mm (-2.5mm exp) Cushing -1.57mm (-800k exp) Gasoline -1.485mm Distillates +1.536mm DOE Crude -2.06mm (-2.5mm exp, -1.77 WHIS) Cushing -1.25mm (-800k exp) Gasoline -1.72mm (+100k exp) Distillates +839k (+1.5mm exp) We're coming into a tricky time of year when refinery maintenance is starting, which should be bearish for crude inventories.

On the demand side, the rolling 4-week average for gasoline demand hit a seasonal record high in data going back to 1990 last week.

Categories: ZH