API Reports Surprise Crude Oil Inventory Draw
By: Tim McPartland,
In a surprising development the American Petroleum Institute (API) reported an inventory draw of 400,000 barrels of crude oil last week. It was expected that there would be another large build of over 4 million barrels. Tomorrow we have the ‘official’ government report from the EIA and the expectations are for a build of 4.4 million barrels. Could this be the start of the turn? We had been producing an extra million barrels per day and the last 2 inventory reports showed builds of over 8 million barrels each week so a draw of any amount would be tremendous progress.
So in summary we have to have little to no build before we can have a drawdown of inventories. Certainly we would not make any investments based on any news today and tomorrow because while this may give energy issues a bit of a lift they will remain on a lifeline. Bounces are not adequate and will be short lived until we get additional weekly inventory data.
Patience is the key here.