WTI Extends Gains After Surprisingly Large Product Draws

Oil prices extended yesterday's gains (helped by EIA's short-term outlook) after a mixed bag from API with a much smaller than expected crude build.

API

• Crude +674k (+1.3mm exp)

• Cushing +492k

• Gasoline +3.65mm (+300k exp)

• Distillates -3.7mm (-2.0mm exp)

DOE

• Crude +5.52mm (+1.3mm exp)

• Cushing -33k

• Gasoline -3.15mm (+300k exp)

• Distillates -3.22mm (-2.0mm exp)

A much bigger than expected build in crude inventories shocked the market but Cushing saw stocks decline for the 5th week in a row (though barely) while both Gasoline and Distillates saw big draws...

Source: Bloomberg

The Biden administration added 615k barrels to the SPR - its 8th weekly rise in a row...

Source: Bloomberg

Cushing stocks are at their lowest since November - and lowest in over a decade for February...

Source: Bloomberg

US Crude production rebounded fully from the storm shut-ins, back to record highs...

Source: Bloomberg

WTI Crude extended the day's gains on the product draws, back above $74...

Still, upside price gains may be "capped down the road due to rapidly falling expectations around aggressive Fed [interest] rate cuts and growing concerns over China's economy," Lukman Otunuga, manager, market analysis at FXTM told MarketWatch.