From: zerohedge
Oil prices are soaring this morning, with WTI rebounding dramatically back above $100 on the heels of demand stress (China reopening) and supply fears (Texas power outage rumors constricting production/refinery capacity and a possible blockage of Kazakhstan’s exports).
WTI is back at $104 after dipping to $96.50 last night after API reported a surprise crude build and follows comments from Goldman that the sell-off was overdone…
So will the official data confirm the API build… and/or any signs of demand destruction?
API
Crude +3.825mm (-1.1mm exp)
Cushing +459k
Gasoline -1.814mm
Distillates -635k
DOE
Crude +8.23mm (-1.1mm exp)
Cushing +69k
Gasoline -2.49mm
Distillates -1.266mm
The official DOE data confirmed and exceeded API’s surprise crude build data, but also showed draws on the product side…
Notably there was another major SPR draw last week (-5.8mm) which likely offsets some of the anxiety over the huge crude build…
US Crude production remained flat at 12.1mm b/d – the highest since April 2020…
Refinery Capacity is still running near record high levels, although it did drop modestly last week after a string of problems on the West Coast weighed on runs
WTI was hovering around $104 ahead of the official data and tumbled back to $103 on the big build…
The crack spread is blowing out again (driven by the crude build and product draws)…
Circling back to the start, the Goldman analysts said the selloff had overshot as “demand destruction through high prices is the only solver left as still declining inventories approach critically low levels.”
In China, there are signs of rising demand as the world’s biggest importer emerges from virus lockdowns. Overall consumption of gasoline and diesel last month was at almost 90% of June 2019 levels, according to people with knowledge of the energy industry.
The good news for Americans is that pump prices have fallen for 23 straight days (the longest losing streak since April 2020)…
But the bad news for President Biden is that’s not helping his ratings.
