Oil prices rallied on the day amid a sliding dollar and increased protests in Venezuela adding to concerns about supply (despite a slowdown in China PMI potentially questioning demand).
“The market is currently witnessing the largest number of barrels subject to potential outage in many years, between Venezuela, Iran, Nigeria, Algeria and Libya,” said Leo Mariani, a KeyBanc Capital Markets Inc. analyst.
API
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Crude +6.81 mm (+1.5mm exp)
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Cushing +1.353mm
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Gasoline -1.055mm (-1.5mm exp)
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Distillates -2.058mm (-1mm exp)
After a surprise crude build last week, expectations were for another small stock rise and yet another gasoline drawdown and API did not disappoint with a large 6.8mm crude build… This is the 11th weekly draw in gasoline (and 7th weekly draw in distillates) in a row…
“We have to keep in mind that with more than 12 million barrels being produced, until we ramp back those refineries up, we will probably see crude stocks build,” Gene McGillian, manager of market research at Tradition Energy, says
WTI hovered around $64 ahead of the API print and kneejerked lower after the
The developments in Venezuela triggered a spate of buying early on Tuesday, but that could reverse just as quickly if the opposition’s chances look shaky, said Michael Hiley, head of OTC energy trading at LPS Futures in New York. In the longer term, Maduro’s ouster could lower prices, he said.
“They have some of the best reserves in the world and you would just need the proper capital investment to crank that up again,” Hiley said. “It will ultimately end up with more oil on the market, but short-term the knee-jerk movement for prices is still up.”
via ZeroHedge News http://bit.ly/2J6yBuo Tyler Durden