- WTI is up 19c to $56.96/Bbl, and Brent is up 12c to $63.95/Bbl
- The American Petroleum Institute (API) reported a whopping 10.96 MMBbl decline in crude stocks last week
- The API data release comes a day before the more closely followed EIA report
- Brent crude’s M1-M2 contracts are in contango for the first time since March
- Contango typically indicates that short-term supply is exceeding demand
- Brent had been in steep backwardation for M1-M2
- Beyond the second month contract, Brent remains in a $5 backwardation through late 2022
- The IMF lowered its forecast for global growth this year, citing the ongoing trade war between the US and China
- In its World Economic Outlook released on Tuesday, the IMF projects the world economy will grow by 3.2% this year, down 0.1 percentage point from its forecast in April
- The IMF, along with other agency reports from the IEA and EIA, are widely used in the modeling behind key oil demand projections
- Demand concerns continue to be the dark cloud on the oil markets and oil price
- EIA petroleum data is due out this morning at 9:30 am CT
- U.S. Crude Inventories: – 4,443 MBbls (Bloomberg surveys)
- U.S. Gasoline Inventories: – 1,395 MBbls
- U.S. Distillate Inventories: + 382 MBbls
- U.S. Refinery Utilization: – 0.08% change
- Natural gas is down 3.2c to $2.268/MMBtu
- This week’s storage numbers are estimated to build by only 33 Bcf
- However, storage facilities across the central and Midwestern portions of the US are noting surging injections after last week’s peak heat spelling less optimistic news for next week’s numbers (PointLogic)
- This is largely the result of the presence of continued cool weather across the United States
- Over the next 15 days, there should be large emerging heat waves across the western half of the United States, as well as portions of the northeast
- However, weather models are also forecasting growing patterns of unseasonably cooler temperatures in the southeast and portions of the Midwest
- Given the weather forecast, SoCal and CIG pricing should continue to remain high through the end of August, spelling good news for D-J producers who have noticeably slowed in production
