Modest overnight gains following API’s data have been erased as DOE reports a massive surprise (biggest since March 2017) crude build…
“We’re right in the middle of refinery maintenance season and you’ll probably see a lot of demand coming offline”, says Michael Loewen, a commodities strategist at Scotiabank. “It might take a few market participants by surprise to see a larger build than what we are used to in crude oil inventories”.
API
DOE
Massive crude build shocks the market…
Bloomberg notes that you can’t really pin this week’s huge crude build on refiners. Gross inputs were little changed and are the highest ever historically for this week.
US Crude production held at record highs…
WTI hovered right around $74 ahead of the DOE data, then dumped…
Bloomberg Intelligence Senior Energy Analyst Vince Piazza warns that with WTI approaching $80 a barrel, we believe oil has moved too far, too fast, notwithstanding reduced Iran exports because of sanctions and declining production from Venezuela. Demand destruction remains a concern due to elevated prices and geopolitics. We also expect heightened hedging by U.S. E&Ps at current prices, while trade tensions, robust production and seasonal refinery maintenance in the U.S. add to the negative price outlook.
