Following last week’s surprise builds in Gasoline and Distillates, API reported a bigger than expected crude draw of 4mm barrels (whioch will be the biggest since 2016 if it holds for DOE). Furthermore, RBOB jumped after gasoline (and distillates) inventories fell (against expectations of a modest build)
Crude -4.158mm (-3.5mm exp) – biggest since 2016
Gasoline -1.93mm (+1mm exp)
Inventory draws across the board…
And the reaction was a kneejerk higher – after an ugly day (thanks to comments from the Saudi crown prince) for WTI (6mo lows) and RBOB (8mo lows)…
Notably, Russian announced production cuts right before the data hit and stated that it favbored extending the OPEC production cut deal.
Iraq oil minister: “Iraq wants prices to rise to $60. This our aim”
WSJ says Saudis and Kuwait also targeting $60
The WSJ is out with a story that’s bullish for oil. They say main producers had been seeking $55 per barrel but now want $60. They believe that level will boost their economies without attracting too much US shale drilling.
The higher price target suggests they will support an extension of quotas at meetings scheduled for the end of May.
The target is symbolic, the WSJ says, but “offers a window into how serious they are about using their supply power to affect the market.”
The big upcoming event is the Saudi Aramco IPO and that’s what is motivating the discipline from the Kingdom.
“They need this price [$60] for the IPO of Saudi Aramco,” a person familiar with Saudi oil policy told the WSJ.