Flip-flopping headlines from OPEC+ leaks and China COVID restrictions prompted a volatile day in crude markets today but WTI ended higher.
OPEC+ does “not like contango and that is what has raised market expectations of deeper cuts,” Amrita Sen, chief oil analyst at consultant Energy Aspects, said in a Bloomberg TV interview.
“I’m not ruling out deeper cuts — that’s of course on the table — but I would say that’s not our base case.”
Earlier in the session, prices rallied above $79 a barrel after Beijing said it would bolster vaccination among seniors then prices briefly flirted with losses after Reuters reported that the production cartel would stick with its current oil-output policy
API
Crude -7.85mm (-2.49mm exp) – biggest draw since April 2022
Cushing -150k
Gasoline +2.85mm
Distillates +4.01mm
This is the 3rd sizable crude draw in a row…and the 3rd straight week of sizable product builds…
Source: Bloomberg
WTI was hovering around $78.50 ahead of the API print and extended gains after…
Notably, the shape of the futures curve has flipped in recent weeks, continuing to signal an oversupplied market.
Source: Bloomberg
That is the largest contango since 2020.
