WTI extended losses this morning after a brief bounce on API’s unexpected crude draw, pushing down to one-month lows below a $70 handle after DOE reported an unexpectedly large crude build.
API
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Crude -2.13mm (+2.5mm exp)
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Cushing +1.5mm
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Gasoline -3.4mm
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Distillates -246k
DOE
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Crude +6.49mm (+2.5mm exp)
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Cushing +1.78mm
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Gasoline -2.016mm (+600k exp)
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Distillates -827k
This is the 4th weekly build for crude (and Cushing stocks) in a row…
Bloomberg Intelligence Energy Analyst Fernando Valle notes that gasoline margins will remain challenged as demand wanes after summer driving season.
WTI traded with a $70 handle ahead of the DOE data – at the low end of the last week’s range – and then legged down on DOE’s big crude build…losing the $70 handle
*NOK, CAD, AUD TO SESSION LOWS VS USD AS WTI OIL FALLS 3%
However, not everyone agrees with the market’s direction:
“Our basic premise is that prices will move higher,” said Harry Tchilinguirian, head of commodity-markets strategy at BNP Paribas SA in London.
“As Iran’s supply losses are fully realized and Venezuela suffers continuous decline, global spare production capacity will ebb and — against a backdrop of average inventories — the market will become more sensitive to adverse supply shocks.”
Meanwhile, WTI Midland’s discount to WTI at Cushing narrowed to $4.50/bbl on Tuesday, smallest since June 21…
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