WTI Extends Gains As Cushing 'Tank Bottoms' Loom After Across-The-Board Inventory Draws

The oil prices are up from yesterday, but they're still well below their overnight highs. After the hospital attack in China and the strong Chinese data, crude prices soared. But then the prices began to fall as it seemed that the US was supporting Israel's version.

The API report released last night also supported crude oil prices by indicating a drop in inventories across the board.

API

Crude -4.38mm (+400k exp)

Cushing -1.00mm

Gasoline -1.58mm (-600k exp)

Distillates -612k (-1.2mm exp)

DOE

Crude -4.49mm (+400k exp)

Cushing -758k

Gasoline -2.37mm (-600k exp)

Distillates -3.19mm (-1.2mm exp)

The official data confirmed API with inventory draws across the board, but most notably Gasoline stock plunged...

Source: Bloomberg

The Strategic Petroleum Reserve has ceased to be filled (it was always a minimal effort). SPR has been essentially inactive for the past 6 weeks.

Source: Bloomberg

Cushing's stockpile is at its lowest level since October 2014, a sign of impending doom.

Source: Bloomberg

US Crude Production Remains at Record Highs

Source: Bloomberg

WTI hovered just above $86.50 before the official data was released and extended gains...

Fernando Valle, Senior Oil & Gas analyst at Bloomberg Intelligence, notes that the

Brent and WTI have moved higher as a result of expectations that supply disruptions will last.

A potential US-Venezuela agreement on sanctions is unlikely to have much of an impact on the short-term supply in Venezuela due to its poor infrastructure. Demand remains the most important short-term factor for oil prices, according to us.