WTI Unimpressed By Small Crude Build, Cushing Draw

A weaker dollar and Saudi Arabia reportedly signaling support for trimming production further sparked a bounce intraday for oil prices but WTI ended the day lower.

“We’ll need to wait until closer to the next OPEC+ meeting to really know the lay of the land instead of relying on preemptive headlines,” said Michael Loewen, director of commodities strategy at Scotiabank in Toronto.

But, all eyes will be on inventories tonight after last week’s surprise crude drawdown and following the Genscape reports this morning

“The Genscape thread running through the industry, that says we’re going to get a good build of Cushing, that kind of tanked the market,” said Bob Yawger, futures division director at Mizuho Securities in New York.

API

• Crude +592k (+2.5mm exp)

• Cushing -846k

• Gasoline +1.599mm (-2.5mm exp)

• Distillates +1.998mm (-2.4mm exp)

After last week’s inventory draw, crude saw a small build (less than expected) while products saw notable builds (against the recent trend of draws as refinery maintenance season may be coming to an end)…

“We’re still in shoulder month so it makes sense we are a little bit ahead of ourselves,” said Jay Hatfield, CEO at InfraCap in New York. “It’s normal for oil to be weak for October.“

WTI bounced from a $54 handle intraday (sparked by reports of a $1.5mm build at Cushing by Genscape), holding around $55.40 ahead of the API print and barely budged on the data…

“We did catch a bit off equities because it serves as a demand indicator,” said Bob Yawger, futures division director at Mizuho Securities in New York. “If S&P and the economy is doing good enough, so will crude oil.”