Oil prices surged to six-week highs today amid increasing US-China trade-deal optimism.
“The U.S. seems more willing to roll back existing tariffs and the fact that they’re talking about that and looking to get something done for this phase-1 deal is going to move oil,” said Josh Graves, senior market strategist at RJ O’Brien & Associates in Chicago.
“If everything stays the course and nothing changes in regards to the trade deal, you’re going to continue to see buying interest in the market.”
But for now, the algos only have eyes for supply…
Crude +4.26mm (+2mm exp)
After last week’s surprise crude build, analysts expected more of the same, and API reported an even bigger than expected crude build of 4.26mm (vs 2mm exp). Products saw another notable draw (5th week in a row) and Cushing stocks rose for the 5th straight week…
WTI was trading around $57.20 heading into the API print and slipped lower after the bigger than expected crude build…
As a gentle reminder, WTI is still down about 14% from a peak at the end of April as the spat between Beijing and Washington has threatened the demand-growth outlook.