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After a surprise drop in inventories, crude oil takes a breather

Crude oil daily update

BY DEB SHAW | 

Crude oil daily update

Crude oil prices are mostly flat today after rising sharply yesterday. Data from the US Energy Information Administration suggested that crude stocks fell yesterday. Against consensus estimates that called for stocks to rise by 2.4m barrels, stocks fell by -1.6m barrels instead. Crude oil prices were up sharply following the news. Looking at WTI, the benchmark ended the day higher by more than $1. Looking deeper into EIA numbers, imports fell below 5 million barrels per day, the lowest numbers since the agency began recording the numbers in 2001. Lower imports and pipeline outages connecting crude oil exports from Canada may be the cause of falling stocks this week. Turning to exports, the US exported more than 2 million barrels per day according to the latest figures. The record high (2.1m bpd) was achieved last October. Despite accelerating exports, crude prices strengthened thanks to the unexpected draw down. Our short-term outlook is neutral, while our medium-term outlook on crude remains bullish. 

WTI is currently trading above $62.60. Brent crude is currently above $66.20.

Looking at US crude oil stocks, the most recent EIA figures (February 22) showed falling crude oil stocks and rising gasoline inventories. Crude oil inventories were much lower than estimates (-1.6m vs. +2.5m expected). Gasoline stocks were up (+0.3m vs. -0.5m expected) while distillate stocks (-2.4m vs. -1.5m expected) were down. Looking at reactions in markets, crude oil prices were up following the EIA report.

Updated 
Outlook
Bearish

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