WTI Dips After Worrisome Surge In Gasoline Stocks, Demand At 5-Month Lows

WTI Dips After Worrisome Surge In Gasoline Stocks, Demand At 5-Month Lows

Tyler Durden

Wed, 11/25/2020 – 10:37

WTI extended gains overnight, after dipping on a surprise crude build reported by API, pushing to 8-month highs above $45 on mounting optimism that recent breakthroughs on a Covid-19 vaccine will lead to a swift recovery in global energy demand next year.

“The recent news around Covid-19 vaccines has boosted crude prices as markets start to look to a return to some sort of normality in 2021,” said HSBC Bank analyst Gordon Gray. “We expect OPEC+ to err on the side of caution as it evaluates how the market evolves.”

Notably, prices have also been supported by renewed geopolitical tensions, with recent attacks on a fuel depot in the Saudi city of Jeddah and on an oil tanker in the Red Sea.

API

  • Crude +3.8mm (-300k exp)

  • Cushing -1.4mm

  • Gasoline +1.3mm

  • Distillates -1.8mm

DOE

  • Crude -754k (-300k exp, +475k whisper)

  • Cushing -1.721mm

  • Gasoline +2.18mm

  • Distillates -1.441mm

Official inventory data flipped the script from API with a 754k draw (vs 3.8mm build). Gasoline stocks rose more than expected (for the second week in a row), which is worrisome…

WTI Dips After Worrisome Surge In Gasoline Stocks, Demand At 5-Month Lows

Source: Bloomberg

Crude production rebounded from storm shut-ins…

WTI Dips After Worrisome Surge In Gasoline Stocks, Demand At 5-Month Lows

Source: Bloomberg

WTI was hovering around $45.30 ahead of the official inventory data, and limped modestly lower after the print…

WTI Dips After Worrisome Surge In Gasoline Stocks, Demand At 5-Month Lows

Bloomberg Intelligence Energy Analyst Fernando Valle notes that gasoline-demand headwinds loom large ahead of the Thanksgiving holiday due to restrictions on travel, with the potential for an extended build in inventories and more pain.

WTI Dips After Worrisome Surge In Gasoline Stocks, Demand At 5-Month Lows

Source: Bloomberg

Gasoline demand remains well below fall 2019 levels at its lowest since June.

Most ominously, Bloomberg reports that the national inventory is at a seasonal high since 1994.

WTI Dips After Worrisome Surge In Gasoline Stocks, Demand At 5-Month Lows

Stockpiles rose 2.2 million barrels to go over 230 million barrels — the U.S. is swimming in gasoline right now.

WTI Dips After Worrisome Surge In Gasoline Stocks, Demand At 5-Month Lows


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