WTI Dips After Biggest Gasoline Build Since April

WTI Dips After Biggest Gasoline Build Since April

Oil prices rose for the seventh straight day today (longest streak in two years), with a weak dollar helping bail out an early drop in WTI to its highest since January 2020.

“The markets are becoming very forward-looking and there’s optimism that we’re going to see a strong rebound in demand,” said Edward Moya, senior market analyst at Oanda Corp.

Saudi Arabia’s decision to unilaterally cut production in February and March “was a game-changer, which has removed oversupply concerns in the short term.”

API

  • Crude -3.5mm (-994k exp)

  • Cushing -378k

  • Gasoline +4.81mm – biggest bvuild since April 2020

  • Distillates -487k

Analysts expected a modest draw last week to make the 3rd weekly drop in crude stocks in a row and API confirmed with a bigger than expected 3.5mm draw. However, gasoline stocks saw the biggest build since April 2020, suggesting demand may not be as robust as some hoped…

Source: Bloomberg

WTI traded around $58.40 ahead of the API print, popped higher initially (crude draw) but faded as the gasoline build data became obvious…

“There is, to some extent, a limit on the upside to prices,” said Rob Haworth, senior investment strategist at U.S. Bank Wealth Management. “We still have a lot of OPEC supply to come onto the market, and the faster prices go higher, it implies OPEC is going to bring back supply sooner.”

Tyler Durden
Tue, 02/09/2021 – 16:36

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