WTI Rebounds Off Lows After Across-The-Board Inventory Draws

Oil prices are tumbling this morning despite lower CPI (juicing rate cut hopes), weak retail sales (but strong gas station spending), and a big draw reported overnight by API. It seems the main downside driver was IEA lowering its 2024 demand forecast.

World oil demand is forecast to grow by 1.1 million barrels per day this year, down 140,000 bpd from last month’s projection.

Global crude inventories surged in March by 34.6 million barrels as trade disruptions pushed oil on water to a post pandemic high, according to the IEA.

The question is – will the official data confirm API’s big crude draw and re-energize prices.

API

Crude -3.1mm (-1.1mm exp)

Cushing -601k

Gasoline -1.27mm (unch exp)

Distillates +349k (+300k exp)

DOE

Crude -2.508mm (-1.1mm exp)

Cushing -341k

Gasoline -235k (unch exp)

Distillates -45k (+300k exp)

The official data shows inventory draws across the board with crude stocks down 2.5mm barrels…

Source: Bloomberg

The Biden admin continued to add to the SPR, adding 593k barrels…

Source: Bloomberg

US Crude production remains flat near record highs at 131.mm b/d…

Source: Bloomberg

WTI was trading just above $77 ahead of the official print and rallied further on the across-the-board draws…

Finally, we note that refinery utilization rates are back above 90%, the highest since January. Rates increased in all regions, with the Midwest rising for the second straight week to 90.8%, from 85.2% in the previous week, as refineries wake up from maintenance.