WTI Dips Back Toward Six-Month Lows After API Reports Across-The-Board Inventory Builds
Today saw some respite in the recent rout for oil prices as WTI stalled its decline around $73 (just off six-month lows) as stocks bounced and lifted Treasury yields, supporting crude for now.
Concerns remain about the outlook for crude demand in China and the U.S. A run of softer-than-expected economic data late last week set in motion the stock-market selloff and weighed on oil futures, analysts said.
Downside appeared to be limited, however, by expectations that Iran would launch retaliatory strikes after it blamed the assassination of a top Hamas official visiting Tehran last week on Israel. U.S. officials have been pressing Tehran not to escalate the conflict, news reports said.
“Oil prices have fallen in the last few days in lockstep” with equities, with limited reaction to developments in the Middle East, Goldman Sachs Group Inc. analysts including Daan Struyven wrote in a note.
The big question is – will the streak of crude draws continue…
API
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Crude +0.18mm
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Cushing +1.07mm
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Gasoline +3.31mm
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Distillates +1.22mm
The five-week streak of crude inventory draws is over as API reports builds across the entire energy complex…
Source: Bloomberg
WTI was trading around $73 ahead of the API print and faded modestly lower, back towards six-month lows, after the across-the-board builds…
The U.S. Energy Information Administration predicts that crude oil prices will recover from recent losses as draws on global inventories accelerate in the second half of the year.
„Although crude oil prices have fallen recently, we continue to expect crude oil prices will rise in the second half of 2024,” the EIA said Tuesday in its monthly Short-Term Energy Outlook. The agency expects international benchmark Brent to return to between $85 and $90 a barrel by the end of the year.
The EIA anticipates withdrawals from global oil inventories will double to 800,000 barrels a day in the second half of the year from an estimated 400,000 barrels a day in the first half. A return to moderate inventory builds is predicted in mid-2025.
Tyler Durden
Tue, 08/06/2024 – 17:20