WTI Holds Gains Despite Big Surge In Product Stocks, Gasoline Demand Slide
Tyler Durden
Wed, 12/02/2020 – 10:37
Oil prices rebounded overnight as hope for an OPEC+ agreement tomorrow (and vaccine hype) trumped a big surprise build in crude and product stocks reported by API.
The algos appear to believe that OPEC can bridge – with production cut extensions – until everything is awesome again post-vaccine and the collapse in air travel and commuting enables a resurgence in fuel demand worldwide.
API
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Crude +4.146mm (-1.7mm exp)
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Cushing -132k
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Gasoline +3.402mm (+2mm exp)
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Distillates +334k (+100k exp)
DOE
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Crude -679k (-1.7mm exp)
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Cushing -317k
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Gasoline +3.491mm (+2mm exp) – biggest build since April 2020
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Distillates +3.238mm (+100k exp) – biggest build since Sept 2020
Official inventory data rebuffed API’s crude build with a modest draw (less than expected), but gasoline and distillates stocks soared far more than expected…
Source: Bloomberg
That is thee first distillates build in 11 weeks.
US crude production could finally be back at a ‘steady’ state as storm-driven shut-ins finally fade away.
Source: Bloomberg
Implied Gasoline demand slipped further on the week…
Source: Bloomberg
WTI hovered just below $45 ahead of the official inventory data – up from the sub-$44 post-API lows overnight –
“The market is pricing in a solution that will not see extra barrels hit the market during the early part of 2021,” said Ole Hansen, head of commodities strategy at Saxo Bank. It appears that “OPEC+ will not shoot themselves in the foot so close to an expected pickup in demand.”
via ZeroHedge News https://ift.tt/33AxUTH Tyler Durden