Oil jumps on surprise US crude drawdown report and OPEC jawboning
- EIA report was bullish for oil.
- Oil was also helped by OPEC jawboning.
US crude oil (WTI) is now trading around 59.50, in the New York session, jumping by almost 0.50% after the US inventory report. So far it made a session high of 59.81 on a surprise crude drawdown figure from the EIA report.
According to the EIA, crude oil inventories came at 1.841M against estimates of 2.825M (prior: 1.895M), which is also in sharp contrast from earlier API data of 3.947M. US crude production came at 10271 mbpd against prior 10251 mbpd in line with market´s estimate.
Also crude stocks fell again at the Cushing, Oklahoma storage hub, and have been cut in half since early November’17. Refining rates fell as US refiners reduced their activity for seasonal maintenance. Gasoline inventories, however, rose 3.6 mbpd, more than the expected 1.229 mbpd and the prior figure of 3.414 mbpd.
Meanwhile, Saudi Oil Minister stated that Saudi Arabia will invest for maximum oil output capacity. But Saudi Oil Minister also said that major oil producers would prefer tighter markets than to end supply cuts too early.
Earlier, oil was under pressure amid a rising USD after an upbeat US CPI report, but it soon recovered onthe bullish EIA inventory coupled with Saudi jawboning that OPEC would rather leave the oil market slightly short of supplies rather than ending too early a deal on cutting output.
Later, the USD reversed its course which in turn is helping the oil right now.