Oil prices dumped and pumped after US SecState Pompeo raised more uncertainty about MidEast and China during an interview with CNBC this morning. WTI did recover back to $56 by the NYMEX close ahead of the inventory data.
“The weakening global economic backdrop continues to control the narrative across equities and other asset classes and the oil market is certainly not being spared,” said Michael Tran, commodity strategist at RBC Capital Markets.
Crude -3.454mm (-1.8mm exp)
Cushing -2.803mm – biggest draw since Feb 2018
After two weekly builds, API reports a bigger than expected crude draw, with Cushing stocks plunging most since Feb 2018…
WTI hovered around $56 ahead of the data, dipped very modestly after but was basically unimpressed…
“The outcome of the next U.S.-China trade meeting will be the true litmus test for oil markets,” said Stephen Innes, managing partner at VM Markets Pte. in Singapore.
“Oil traders don’t want to race too far ahead of the economic realities of the trade war narrative, so a bit of profit-taking is in order.”
Of course, as Bloomberg notes, The Federal Reserve will hold its annual symposium in Wyoming later in the week, where Chairman Jerome Powell’s remarks will be closely watched.