WTI Holds Stimulus-Hope Gains After Surprise Crude Draw

WTI Holds Stimulus-Hope Gains After Surprise Crude Draw

Tyler Durden

Wed, 09/30/2020 – 10:35

Oil prices rebounded overnight as stocks rallied on fiscal stimulus hope and the API-reported inventory data sank in.

“Traders see oil demand as fragile,” said Paola Rodriguez-Masiu, senior oil-market analyst at Rystad Energy. “We may see some production needing to be sent to inventories in 2020’s last quarter.”

API

  • Crude -831k (+1.9mm exp)

  • Cushing +1.61mm

  • Gasoline +1.623mm (-1.3mm exp)

  • Distillates -3.424mm (-1.7mm exp)

DOE

  • Crude -1.98mm (+1.9mm exp)

  • Cushing +1.785mm

  • Gasoline +683k (-1.3mm exp)

  • Distillates -3.184mm (-1.7mm exp)

A surprisingly large crude draw combined with a big distillates draw…

WTI Holds Stimulus-Hope Gains After Surprise Crude Draw

Source: Bloomberg

Most of the storm-impacted noise has now left the data.

WTI Holds Stimulus-Hope Gains After Surprise Crude Draw

Source: Bloomberg

WTI hovered around $39.50 ahead of the official data and maintained those levels immediately after…

WTI Holds Stimulus-Hope Gains After Surprise Crude Draw

Finally, we note that Bloomberg Intelligence Senior Energy analyst Vince Piazza warns that “daily U.S. crude output has crept close to 11 million barrels a day from the May low of 10 million, adding supply to a market whose downstream demand remains depressed by the effects of Covid-19. Well completions could drive production higher, and that would be compounded by any move of WTI into the high $40s. Coronavirus outbreaks in Europe and elsewhere add to the pressure on demand, and we believe adjusted storage remains high and limits long-term rally prospects.

WTI Holds Stimulus-Hope Gains After Surprise Crude Draw


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