WTI Maintains Losses Despite Unexpected Crude Inventory Draw

Oil prices tumbled today after The IMF slashed global growth estimates (following The World Bank yesterday) and wasn’t helped by Jim Bullard’s hawkish comments or China’s health officials saying that the Covid Zero approach will continue, with the country deploying strict lock downs that are snarling up the world’s second-largest economy.

“It’s a fairly supplied market for now and one which doesn’t look like we’re in crisis mode at this point, but one where we do need to get more production,” said Rob Haworth, senior investment strategist at U.S. Bank Wealth Management.

Still, production issues in Libya are providing a bullish element to the market, and EU’s plan to halt all Russian oil flows likely won’t help bring prices down at all.

API

• Crude -4.496mm (+2.533mm exp)

• Cushing +93k

• Gasoline +2.933mm

• Distillates -1.652mm

After last week’s huge build, API reports a sizable 4.496mm crude inventory draw (very different from the 2.533mm build expected). Gasoline stocks saw a sizable build last week…

Source: Bloomberg

WTI hovered around $102 ahead of the API data – having plunged from over $109 overnight…

As we detailed earlier, a full and immediate ban on Russian oil could push crude to $185 a barrel, JPMorgan said in a report.