WTI Extends Gains After Bigger Than Expected Crude Draw

WTI Extends Gains After Bigger Than Expected Crude Draw

Oil prices ended a roller-coaster day higher (WTI above $61) after the deep freeze shut in a stunning 40% of US crude production (prices higher), headlines reported that the Saudis plan to boost production going forward (prices dived), and a late-day buying panic post-FOMC Minutes (ignoring transitory inflation factors).

“We’re at a very delicate point here,” said Bob Yawger, head of the futures division at Mizuho Securities. OPEC+ has “to make sure the associated demand is there before increasing the barrels and not kill the golden goose here, which is what they’ll do if they add everything at once.”

Today’s reported inventory data is unlikely to show any of the affects from the current storm (although potentially some stockpiling may have occurred)…

API

  • Crude -5.8mm (-2.15mm exp)

  • Cushing -3.00mm

  • Gasoline +3.90mm (+1.397mm exp)

  • Distillates -3.50mm (=1.57mm exp)

As analysts expected, crude stocks drew down for a 4th straight week (and more than expected). Gasoline stocks rose for the 6th week of the last 7…

Source: Bloomberg

WTI was hovering around $61.20 (highs of the day) ahead of the API print, and extended gains after the bigger than expected draw…

“This arctic blast is really delivering a key surprise that’s elevating prices,” said Edward Moya, senior market analyst at Oanda Corp. “The short-term disruption underlines the fragility of where we are with supplies, and we could see a number of different events that could provide us with another surge higher.”

Tyler Durden
Wed, 02/17/2021 – 16:41

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