Crude oil prices were flat yesterday and remain flat this morning. While crude was initially rising yesterday, the commodity fell after inventory data from the American Petroleum Institute was announced. API numbers showed a significant build in refined product inventories which overshadowed a larger-than-expected fall in crude oil inventories. The market interpreted higher-than-expected refined product stocks as a sign of lackluster end-user demand. In a broader take on crude oil published yesterday, we argued that US supply and excessive speculator optimism towards crude oil are the biggest risks to the ongoing rally. Our short and medium-term outlook on crude remains bullish.
WTI is currently trading just above $57.40. Brent crude is currently above $62.70.
Looking at US crude oil stocks, the most recent EIA figures (November 29) showed falling crude oil stocks and rising refined inventories. Crude oil inventories were lower than estimates (-3.4m vs. -3m expected). Gasoline stocks were up (+3.6m vs. +1.4m expected) while distillate stocks (2.7m vs. +0.7m expected) were also up. Looking at reactions in markets, crude oil prices rose following the EIA report.