WTI Extends Losses After API Reports Massive Crude Inventory Build

Oil prices tumbled back to earth today, erasing Sunday night’s gains on apparent optimism that the Irasel0-Hamas war wouldn’t last long and wouldn’t disrupt oil market in the MidEast. Sounds pretty optimistic to us but hey.

There may have been some downward pressure also as traders weighed EIA’s monthly Short-Term Energy Outlook which reported that US crude production surged to a record during the third quarter and is expected to climb further above 13 million barrels a day

Meanwhile, US gasoline consumption for 2023 was revised slightly lower to 8.84 million barrels a day, though still above last year. Total domestic oil demand also saw a modest downward revision to 20.07 million barrels a day, while world consumption remains little changed at 100.92 million barrels a day.

Still tonight’s first glimpse at inventory data will likely trigger the next leg in WTI, especially after last week’s huge surge in gasoline stocks (drop in demand).

API

• Crude +12.94mm (+900k exp)

• Cushing -547k

• Gasoline +3.56mm (+400k exp)

• Distillates -3.53mm (-300k exp)

APi reported a massive crude inventory build of almost 13mm barrels – the biggest since Feb 2023. Cushing stocks fell again and did Distillates (the biggest draw since May)…

Source: Bloomberg

AlphaBBL reports that Cushing stocks fell 682k barrels last week, back towards ‘tank bottoms’.

WTI was hovering just below $84 ahead of the API print and extended losses after the big draw…

The US and Venezuela, meanwhile, are close to reaching an understanding that would bring limited sanctions relief in exchange for steps to ensure fair elections, according to people familiar with the matter. As part of the informal deal, the US would be willing to lift some oil and banking sanctions.

Additionally, the New York Times reported that US intelligence shows Iran was surprised by Hamas’s attack on Israel. That may reduce the chances of additional sanctions on Iranian oil and help prevent the nation and its proxies across the Middle East from being drawn into the conflict.

Worth noting that this CNN story laundering Biden admin spin was co-written by Natasha “Fusion GPS” Bertrand, who in addition to being used to run the Russia collusion scam also was the sole author of the 2020 Democrat info op of “Hunter Biden’s laptop is disinformation!” pic.twitter.com/lFP4p8BSp0

— Mollie (@MZHemingway) October 11, 2023

However, OPEC+ leader Saudi Arabia on Tuesday reiterated support for the group’s efforts to balance oil markets.