FAST FIVE: WTI Holds Overnight Gains After Record Crude Production, Big Product Draws
WTI Holds Overnight Gains After Record Crude Production, Big Product Draws Oil prices extending gains from API's reported big product draws overnight and hopes of progress in US-China talks Market will also be looking out for impact of higher global freight rates on US crude exports because of US sanctions on Cosco, says Bob Yawger, director of the futures division at Mizuho Securities USA.
“The tanker shortage has increased tanker rates by 100% in many cases, and hence prices out US exports” But for now, all eyes (and algos) will be on inventory data.
API Crude +4.13mm (+1.7mm exp) Cushing +1.24mm Gasoline -5.94mm Distillates -3.98mm DOE Crude +2.93mm (+1.7mm exp, +1.4mm whisper) Cushing +941k Gasoline -1.213mm (-900k exp) Distillates -3.943mm – biggest draw since March 2019 As refinery maintenance season starts, product inventories should remain subdued and distillates saw a notable inventory draw (the biggest since March) as the crude build came in lower than API reported (4th crude build in a row).
Source: Bloomberg US Crude production surged 200k b/d, reaching a new record high despite the continued collapse in rig counts.
The precise, sophisticated attack on installations deep in Saudi territory will probably lead to some kind of retaliation, though we are moving toward the view that direct military intervention is not as likely as some less transparent kind of action.” WTI was hovering around $53 ahead of the DOE data (off the overnight highs) having flash-crashed briefly down to a $51 handle yesterday around Powell/Trump headlines.