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WTI holds losses after big commodity draws

WTI holds losses after big commodity draws

Oil prices sank further this morning, after rallying last night on product inventory cuts reported by the API, as macro data from China last night did not suggest A strong reopening and the European banking system joining the systemic crash freight train is not helping sentiment as Oil stands alone for now in pricing an impending recession.

“The energy complex appears to be connecting the dots between recent banking problems and a possible recession,” oil consultancy Ritterbusch and Associates told clients on Tuesday.

In addition, the EIA says global oil markets are struggling with a surplus as Russian output defies predictions of a decline while fuel demand is slowly picking up.

“Global oil supply should comfortably exceed demand in the first half of the year,” said the agency, which advises major economies.

“Much of the overhang in supply reflects vast Russian barrels rushing to be rerouted to new destinations.”

Will we see another US crude build as the API reported last night?

API

Gross +1.16mm (+100k exp)

Cushing -950k

Petrol -4.59mm (-1.2mm exp)

Distilled -2.89mm (-600k exp)

DOE

Gross +1.55mm (+100k exp)

Cushing -1.916mm – Biggest draw since May 2021

Petrol -2.061mm (-1.2mm exp)

Distilled -2,527 mm (-600k exp)

U.S. Crude Stockpiles rose last week, but Products and Cushing experienced significant declines…

Source: Bloomberg

The now much-watched “adjustment factor” in the DOE data is back near all-time highs…

Total crude inventories remain at their highest since May 2021…

Source: Bloomberg

Inventory levels in downtown Cushing are moving from two-year highs…

Source: Bloomberg

U.S. crude output was flat last week as rig counts trended lower…

Source: Bloomberg

WTI traded below $69 ahead of the official data and rose modestly after…

Central banks’ final path on interest rates could have big implications for the oil patch, said Dan Pickering, chief investment officer at Pickering Energy Partners. “There’s an economic slowdown somewhere,” said Mr. Pickering.

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