WTI Drops After Huge Crude Build, US Production Back At Record Highs

Oil prices extended gains overnight after API reported big product draws (which offset a large crude build) and on geopolitical concerns rising once more after Israel launched an extensive wave of attacks in Lebanon, Israel Defense Forces spokesperson Daniel Hagari said on social media Wednesday.

Additionally, OPEC’s top official said Tuesday that global oil demand is set to expand strongly, while a monthly outlook from the group revealed limited compliance with the members’ latest round of supply cuts.

“Oil has weathered the financial storm decisively, but copious upside potential might be too much of an ask,” said Tamas Varga, an analyst at brokerage PVM

Will the official data confirm API’s major draws and builds?

API

Crude +8.5mm (+2.8mm exp)
Cushing +512k
Gasoline -7.2mm (-1.0mm exp) – biggest draw since Sept 2021
Distillates -4.0mm (-2.2mm exp) – biggest draw since May 2023

DOE

Crude +12mm (+2.8mm exp)
Cushing +720k
Gasoline -3.7mm (-1.0mm exp)
Distillates -1.9mm (-2.2mm exp)

The official data more than confirm the huge crude inventory build (over 12mm barrels) but the product draws were smaller than API reported. Cushing saw a rise in stocks for the first tin 6 weeks…