WTI Dips After Surprise Crude Build

Oil prices rallied today, with WTI back above $63 as the OPEC+ Joint Ministerial Monitoring Committee came and went without issue (discussing the desire to gently raise production as demand comes back… as expected). The group confirmed it will not hold a full ministerial meeting on Wednesday as planned, delegates at the Joint Ministerial Monitoring Committee (JMMC) agreed at their meeting on Tuesday, signaling confidence in the current plans to ease the production cuts While India fears remain, many remain confident in the recovery in the rest of the world…

“You’re seeing incredibly strong demand,” BP Plc Chief Executive Officer Bernard Looney said in a Bloomberg TV interview on Tuesday.

China’s oil demand is above pre-pandemic levels, the U.S. is almost back there and “vaccines are going to kick in now in Europe.”

For now, the next clue will come from inventories…

API

• Crude +4.319mm (-200k exp)

• Cushing +742k

• Gasoline -1.288mm

• Distillates -2.417mm (-1.2mm exp)

After the prior week’s surprise crude build (albeit small), analysts expected a small draw last week but were likely shocked when API reported a big surprise 4.319mm crude build…

Source: Bloomberg

WTI hovered around $63.20 ahead of the print and dipped modestly after

Not everyone is excited:“If the grim trend continues, the oil demand loss India will experience could be the single largest reduction in absolute terms that any country has suffered since the beginning of the pandemic,” Rystad Energy said in a note. The firm added that there is some optimism around the plans by OPEC+. “Should OPEC+ turn a blind eye to India though, the gains may quickly evaporate,” Rystad added.