Crude oil prices are currently slightly lower - both WTI and Brent crude are weakening today. Yesterday, the commodity was up sharply thanks to both improving risk sentiment (as trade war fears ease) and thanks to the risk of a military intervention in Syria. While Syria is not a major oil producer, the ongoing conflict involves many foreign oil producers including Iran, Russia and Saudi Arabia. As a result, the increasing likelihood of a US/European military intervention is driving crude oil prices higher.
Turning to data, unofficial figures from the American Petroleum Institute suggest that both crude and gasoline stocks were higher last week (the consensus expected stocks to keep falling). Thanks to strong demand and relatively subdued supply, recent inventory data has mostly crude oil prices. Following the API figures, concerns of an inventory glut are once again weighing on the commodity. Yesterday's API figures will be confirmed by upcoming US EIA data later today. Our short-term outlook on crude is currently neutral, while our medium-term outlook remains bullish.
WTI is currently trading above $65.30. Brent crude is currently above $70.70.
Looking at US crude oil stocks, the most recent EIA figures (April 4) showed falling crude oil stocks and falling refined product inventories. Crude oil inventories were significantly lower than estimates (-4.6m vs. +0.4m expected). Gasoline stocks were down (-1.1m vs. -1.5m expected) while distillate stocks (+0.5m vs. -1.0m expected) were up. Looking at reactions in markets, crude oil prices strengthened following the EIA report.