WTI Holds Gains After API Reports Crude/Cushing Builds, Distillates Draw

Image Source: Oil prices managed gains today as MidEast risks trumped hawkish sentiment (and may even have been helped by a rise in rate-cut expectations as banking crisis fears reawakened).The EIA report – saying oil inventories will fall and so will US production – also supported price action today.Prices pared gains and even briefly declined after Qatari Prime Minister Sheikh Mohammed Bin Abdulrahman Al Thani said at a news conference that Hamas’s response in negotiations over a ceasefire with Israel has been “positive.”But, as we note below, trading was very choppy today.API

Crude inventories rose very modestly for the second week in a row. Cushing saw stockpiles rise after 4 weeks of draws. Gasoline stocks built for the 6th straight week and distillates drew-down for the 3rd week…Source: BloombergWTI was trading around $73.50 ahead of the print and was basically unchanged after…As the chart below shows, the day-session trading was extremely choppy as trend-following algos took control“Current price action is instead consistent with CTA buying activity across both WTI and Brent crudes, as rangebound trading activity whipsaws trend signals once again,” Daniel Ghali, a commodity strategist at TD Securities, wrote in a note to clients.In its influential monthly Short-Term Energy Outlook, the EIA said it sees inventories dropping by 0.8-million barrels per day during the current quarter, supporting prices. As well, it sees US oil production dropping off a record.“We forecast production will return to almost 13.3 million b/d in February but then decrease slightly through the middle of 2024 and will not exceed the December 2023 record until February 2025,” the outlook noted.More By This Author: