WTI Dips After Smaller Than Expected Crude Draw
Despite the Israel-Lebanon truce holding (for now), oil prices inched higher overnight after API reported a sizable crude draw and on speculation that OPEC+ will delay restoring output.
“On one hand, OPEC+ appears to be reluctant to unwind, given concerns over weak oil demand and market consensus that 2025 looks like a surplus year for oil balances,” Citigroup Inc. analysts including Eric Lee wrote in a note.
“On the other hand, deeper cuts also seem unlikely, with prices still above $70 Brent, global observable oil inventories relatively low, and some geopolitical risk still in the market.”
Will the official data confirm API's?
API
Crude -5.9mm
Cushing -734k
Gasoline +1.8mm
Distillates +2.5mm
DOE
Crude -1.844mm
Cushing -909k
Gasoline +3.314mm
Distillates +416k
The official data confirmed a drawdown in crude stocks and at the Cushing hub while Gasoline inventories rose the most since July...
Source: Bloomberg
Overall, including a 1.17mm barrel add to SPR, crude inventories declined 672k barrels - the most since the second week of October...
Source: Bloomberg
After last week' dip, US crude production ramped back up to record highs this week...
Source: Bloomberg
WTI dipped on the smaller than expected crude draw..
Source: Bloomberg
Price moves were exacerbated by thin pre-holiday trading, with open interest hovering near monthly lows.