WTI Extends Gains After Surprisingly Large Crude Draw

WTI Extends Gains After Surprisingly Large Crude Draw

Oil prices surged today with WTI back above $53 for the first time in 10 months having risen for 6 straight days since the Saudis fell on their swords (or scimitars?) over OPEC production cuts.

“It’s been a dynamic bull trend and the market continues to anticipate inventories are going to be drawn pretty sharply as a result of the Saudi production cutbacks,” said Andrew Lebow, senior partner at Commodity Research Group.

“But, at some point, when you get into these bull moves, the market tends to overshoot where the equilibrium price is.”

API

  • Crude -5.821mm (-1.9mm exp)
  • Cushing -232k
  • Gasoline +1.876mm
  • Distillates +4.433mm

Analysts expected crude stocks to fall for the 5th straight week and a draw they got with a large 5.8mm drop (dramatically more than the 1.9mm draw expected). Products saw notable builds however…

Source: Bloomberg

WTI pushed up above $53 today – 10-month highs – amid its longest stretch of gains since May ahead of the inventory data.

“It’s widely thought that above $50 for WTI, shale production starts to swing back in numbers,” said Michael McCarthy, chief markets strategist at CMC Markets Asia Pacific.

“The market will certainly be watching U.S. inventory data very closely over the coming weeks to see if that comes to fruition.”

And WTI extended gains after the surprisingly large crude draw,,,

Given the recent surge in oil prices and rig additions, U.S. crude production in the Lower 48 states should start to increase from the second quarter of this year, the Energy Information Administration said in a monthly report on Tuesday.

Tyler Durden
Tue, 01/12/2021 – 16:34

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Author: Tyler Durden

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