WTI managed modest gains today amid mideast chaos (drones striking saudi pipeline which followed damage to four oil tankers anchored off the United Arab Emirates on Sunday), after slumping yesterday on trade war (growth) concerns.
“There’s really not a good reason for crude to trade lower right now,” said Bob Yawger, futures director at Mizuho Securities USA.
“You’ve got growing geopolitical risk, and you’re risk-on right now in the equity markets.”
But aside from all the speculative geopolitics, fundamental supply and demand still matter…
Crude +8.6mm (-1.3mm exp)
Cushing +2.1mm (+1.3mm exp)
Gasoline +567k (-300k exp)
Distillates +2.2mm (-1.0mm exp)
After last week’s surprise crude draw, API reported a big surprise crude build and builds for products too…
WTI hovered just below $62 handle ahead of the API print but kneejerked lower after the surprise build…
“We are witnessing a tussle between economic concerns and tightening oil-market balance,” said Tamas Varga, an analyst at PVM Oil Associates Ltd. in London.
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