Oil prices rallied today to one-week highs – despite weak jobs data – as the dollar dived and everything went wildly risk-on. Potential shut-ins from Hurricane Idalia combined with more Chinese stimulus measures trumped news of additional Russian supplies as physical markets continue to show signs of tightness.
“The oil market remains rangebound, with underlying support stemming from continued tightness across fuel products,” said Ole Hansen, head of commodities strategy at Saxo Bank.
The recent draws in Crude (and at Cushing) are expected to continue…
API
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Crude -11.486mm (-2mm exp)
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Cushing -2.23mm
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Gasoline +1.4mm (-1.3mm exp)
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Distillates +2.46mm (-500k exp)
Crude stocks drew-down for the 3rd week in a row, plunging 11.5mm barrels last week (perhaps in preparation for Idalia?)…
Source: Bloomberg
WTI was hovering around $81.20 ahead of the API print and extended gains modestly after…
And the higher oil goes, the more pressure down the pipeline for pump prices (and inflation), especially if Idalia shuts down refiners.
