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The American Petroleum Institute (API) reported a crude oil inventory draw of 650,000 barrels for the week ending Jan 11, compared to analyst expectations that we would see a draw in crude oil inventories of at least 2.5 million barrels.
Last week, the API reported a surprise crude draw of 6.127 million barrels. A day later, the EIA showed that inventories had drawn down 1.7 million barrels from the previous week.
Leading up to today’s data release from the API, crude oil prices were trading up on the day after a rough start to the week, as traders strengthening faith in OPEC and its allies that it will do whatever it takes to keep the markets balanced, and in a de-escalation of the trade war between China and the United States.
At 1:41pm EST on Tuesday, WTI was trading up on the day $1.32 (+2.61%) per barrel at $51.83—a rise of more than $2 since the last API report. Brent crude was trading up $1.33 (+2.25%) at $60.32—a near $2 increase from this time last week.
Inventories in the Cushing, Oklahoma facility this week fell by 796,000 barrels.
The API this week reported another large build in gasoline inventories for week ending January 11 in the amount of 5.99 million barrels.
US crude oil production as estimated by the Energy Information Administration showed that production for the week ending January 4—the latest information available--stayed at 11.7 million bpd for the third week in a row.
Distillate inventories increased this week by 3.214 million barrels, much less than last week’s 10+ million barrels build
The U.S. Energy Information Administration report on crude oil inventories is due to be released on Wednesday at 10:30a.m. EST.
By 5:11pm CST, WTI was trading up at $52.07 and Brent was trading up at $60.60.
By Julianne Geiger for Oilprice.com
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Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group.
The draws between both Crude and at Cushing total 1,356,000 bbl...the expectation for Crude alone was for a draw of 2,500,000 bbl (a difference of 1,144,000 bbl which is closer to the actual number of the total draws).
Now, compare the builds:
A combined total of 9,204,000 bbl of petroleum product--which means there was a net increase of 7,848,000 bbl which is almost 4 times as much of the draws (which are already figured in this number).
But 'algos' seems to think this is all bullish news as both WTI & RBOB are trading up since this report from API. Why is RBOB Gasoline futures trading on the upside at all lately?
All API & EIA have reported for the past month is nothing but builds.
If there is a draw reported in crude, then WTI goes up.
But if there are builds in gasoline, RBOB still goes up!! (by another $0.05 today alone)
Why are there 2 separate commodities if the "market" (really, just 'algos') treats them the same?!
"U.S. crude rises 3.2%, settling at $52.11, on hopes for China economic stimulus"
This was today's headline at the close...is oil ever down on "hopes" for any reason?!