Oil prices actually rallied today, reversing a tumble the previous day that was kicked off by Saudi Arabia trimming its official selling prices.
Underpinning the rebound are continued attacks on merchant shipping in the Red Sea and shutdowns of major oil fields in Libya.
Crude prices have also tracked the trajectory of equity markets as they pared their losses for the day.
API
Crude -5.125mm (-600k exp)
Cushing -625k
Gasoline +4.896mm (+2.1mm exp)
Distillates +6.873mm (+1.00mm exp)
Another large crude draw along with major product builds in the week-ending Jan 5th... and stocks at Cushing fell for the first time since October...
Source: Bloomberg
WTI was trading around $72.25 ahead of the API print and was flat after...
On the bright side (for oil bulls), the US benchmark’s prompt spread, a critical barometer for supply and demand, briefly flipped to a bullish structure known as backwardation for the first time since November.
In the options market, some traders are betting that the worst of oil’s early-year malaise may be over, with contracts that would profit from a rally above $110 in June futures changing hands in large volumes.
Finally, the EIQA said in its monthly report that it expects, global oil demand will exceed supply by 120,000 barrels a day in 2024 as output cuts by OPEC+ tighten the market. That modest supply deficit could push Brent futures to average $85 a barrel in March.
Recent days have also seen a surge in oil-tanker rates as one Asian shipper sparked a frenzy by hiring a slew of vessels. The move has tightened the availability of the world’s largest tankers and led to the biggest one-day gain in the cost of hauling oil from the US to China since November 2022. High freight rates can sometimes make it difficult to send cargoes over long distances.
