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Oil prices rallied overnight as expectations (prompted by API’s report last night) of inventory drawdowns dominated fears of a Delta-driven drop in demand.

“This price catalyst may inject some much-needed momentum into proceedings, especially after the API set a bullish tone,” said Stephen Brennock of broker PVM, referring to the EIA report.

But, a rising number of coronavirus cases worldwide, despite vaccination programs, has limited the upside for oil and remains a concern.

API

EIA

Official EIA data confirmed API’s report that inventories drew down across all segments…

Source: Bloomberg

Gasoline demand was steady for the 3rd straight week after the July 4th spike…

Source: Bloomberg

US crude production continues to remain relatively well disciplined, but had started to accelerate amid high prices and high rig counts. Last week saw production slip back however (-200k b/d)…

Source: Bloomberg

WTI hovered right below $72 ahead of the EIA data and rallied back above it on the draws…

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