Crude oil is slightly lower today. Looking at benchmarks, WTI is selling off while Brent crude is currently flat. Last week, crude oil surged thanks to rising political tensions and supportive inventory data. Saudi Crown Prince Mohammed bin Salman met with President Trump in the US, while Venezuelan production continued to crater. Turning to EIA data, crude stocks fell by 2.6m barrels last week, surprising many who expected inventories to keep rising (based on API figures). Gasoline and distillate inventories also fell last week.
While risk sentiment is currently rebounding (most equity future indices are higher today), optimism is not supportive for crude oil just yet. Our short-term outlook and medium-term outlook on crude oil is bullish.
WTI is currently trading above $65.60. Brent crude is currently above $70.30.
Looking at US crude oil stocks, the most recent EIA figures (March 21) showed falling crude oil stocks and falling gasoline inventories. Crude oil inventories were lower than estimates (-2.6m). Gasoline stocks were down (-1.7m) while distillate stocks (-2m) were also down. Looking at reactions in markets, crude oil prices strengthened following the EIA report.