Despite Saudi threats to the shorts, oil prices ended significantly lower to cap an ugly month ahead of OPEC’s meeting this weekend after a weak China PMI print overnight and nothing from US data to spur any excitement.
Prices “remained on the defensive after China’s manufacturing PMI showed more signs of weakness in May, adding to concerns about the outlook for demand from the world’s biggest importer. Lower prices ahead of the OPEC+ weekend meeting may raise the temperature in the room with Russia continuing to pump while key Middle East producers have shown constraint”, Saxo Bank noted.
After last week’s surprise (and large) draw in official crude stocks, it appears API is playing catch up with expectations of another large drop.
API
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Crude +5.2mm (-5.1mm exp)
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Cushing +1.777mm
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Gasoline +1.89mm (-900k exp)
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Distillates +1.849mm (+500k exp)
API reports a big surprise crude build – exactly opposite of what was expected. All the cohorts saw sizable builds last week…
Source: Bloomberg
WTI was hovering just above $68 ahead of the API print and extended losses on the build…
US demand for oil and diesel was more robust in March than previously thought, but remained below levels seen at the same time a year ago.
Finally, we note that a DOE report Monday indicated that the Biden admin sold another 2.6 million barrels of crude last week from the nation’s Strategic Petroleum Reserve to the commercial side.
