WTI Holds Losses Despite Bigger Than Expected Crude Draw
Oil prices fell again today - to two-week lows - as dismal data out of China raised doubt on demand forecasts.
“Oil markets are suffering from economic growth concerns,” said Giovanni Staunovo, an analyst at UBS Group AG.
“Chinese economic data continues to disappoint, while in the US economic data - retail sales - came in on the stronger side, with market participants concerned that requires even higher policy rates from the Fed.”
After last week's big crude build, expectations are back to another draw...
API
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Crude -6.195mm (-1.7mm exp)
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Cushing -1.00mm
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Gasoline +700k (-1.2mm exp)
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Distillates -800k (-100k exp)
US Crude stocks fell by a much bigger than expected 6.2mm barrels last week. Inventories at the Cushing hub also fell (for the 6th week in the last 7). There was a surprise build in gasoline stocks...
Source: Bloomberg
WTI was hovering around $81 ahead and barely blipped higher on the big draw...
Interestingly, Bloomberg notes that the weakening sentiment comes despite physical markets continuing to flash signs of strength. Crude inventories at the Cushing, Oklahoma, hub are seen draining to their lowest level since April, while Asian refineries continue to ramp up imports.
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