Oil prices on the benchmarks, $WTI and $BRENT slipped to the lower-end of their recent ranges after a big crude draw from the Cushion reserves. WTI dropped below $70 shrugging off any ‘war premium’ from the Russian unrest and seemingly weakening on expectations of a more hawkish Fed after strong economic numbers today.
API
- Crude -2.4mm (-1.47mm exp)
- Cushing +1.45mm
- Gasoline -2.85mm
- Distillates +777k
DOE
- Crude -9.6mm (-1.47mm exp)
- Cushing +1.2mm
- Gasoline +603k
- Distillates +123k
US crude stockpiles plunged 9.6mm barrels last week – far greater than expected. Products saw small builds…
Source: Bloomberg
Inventories at the Cushing Hub rose to their highest since June 2021
Source: Bloomberg
Despite the ongoing promise by the Biden admin to start refilling, the SPR was drained last week for the 13th straight week (-1.35mm bbl)
Source: Bloomberg
The US oil rig count has plunged in recent weeks – now at its lowest in over a year – but US crude production has not inflected yet…
Source: Bloomberg
WTI was trading just below $68 ahead of the print – at the low end of its recent range – but rallied back above $68 after the big draw…
In fact, as Bloomberg’s Grant Smith reports, oil price spreads are sending an ever-stronger signal of oversupply in global markets, and flashing a warning sign for the OPEC+ alliance.
“The market appears to have quickly discounted any meaningful supply risk tied to the short-lived uprising by Russian paramilitary forces over the weekend. That comes amid a broader trend that has seen Russian crude exports frequently come in above expectations over the past year as the country continues to find buying interest from China and other developing markets to counter lost market share in the U.S. and EU,” said Robbie Fraser, manager of global research and analytics at Schneider Electric, in a note.
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