Crude oil prices (both Brent and WTI) are currently weaker thanks to fears of a trade war and rising inventories. While crude was up sharply yesterday, the commodity reversed course after economic adviser Gary Cohn resigned from the White House. As we wrote in our US dollar daily update, Cohn resigned due to his opposition of Trump's proposed tariffs. As the outlook for global growth falls, riskier assets such as crude oil and equities are both falling. Turning to data, figures from the American Petroleum Institute showed a higher-than-expected build in crude oil inventories. This was partially offset by lower-than-expected gasoline inventories, suggesting high demand from end-users. Official US EIA figures will be announced later today. In other news, Reuters is reporting that the recent meeting between OPEC and US shale executives went well. Given US anti-trust regulations, US shale producers cannot voluntarily reduce shale supply. Our short-term outlook is neutral, while our medium-term outlook on crude remains bullish.
WTI is currently trading above $61.90. Brent crude is currently above $65.0.
Looking at US crude oil stocks, the most recent EIA figures (February 28) showed rising crude oil stocks and gasoline inventories. Crude oil inventories were higher than estimates (+3.0m vs. +2.8m expected). Gasoline stocks were up (+2.5m vs. -0.8m expected) while distillate stocks (-1.0m vs. -1.0m expected) were down. Looking at reactions in markets, crude oil prices fell following the EIA report.