Oil prices spiked most in seven months today following the China tariff delay headlines on optimism of a deal (or easing in tensions).
“Some of the pessimism about oil demand and the trade war is being washed out of the market by these announcements,” said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts.
Crude +3.7mm (-2.5mm exp)
Cushing -2.5mm - biggest draw since June 2018
The surprise build in crude stocks last week broke a 7-week streak of draws, and analysts expected a return to draws in the latest week. However, API reported a surprise build of 3.7mm barrels. Notably, Cushing saw a 2.5mm draw - the largest since June 2018.
WTI hovered around $57 the figure, but started sliding notably ahead of the data and tumbled further on the 2nd surprise build in a row (Of course, WTI is still up on the day)...
“We still have an undecided oil market,” said Ole Sloth Hansen, head of commodity strategy at Saxo Bank A/S in Copenhagen.
“That may be surprising, given the renewed verbal intervention from oil producers increasingly frustrated to see that their medicine -- production cuts -- isn’t having the desired effect.”