Overnight weakness (Israel-Hamas peace deal headlines) was offset by a marginally softer-than-expected CPI print (dovish demand hopes) to send oil prices higher this morning (WTI at $79). Additionally, oil prices were supported by OPEC’s forecast of another year of steady oil demand growth, driven by India and China, in its first detailed assessment of 2026.
Overnight saw a mixed picture from API again with strong product builds while crude stocks decline…
API
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Crude -2.6mm (-3.5mm exp)
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Cushing +600k
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Gasoline +5.4mm
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Distillates +4.9mm
DOE
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Crude -1.96mm (-3.5mm exp)
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Cushing +765k – biggest build since Oct
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Gasoline +5.85mm
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Distillates +3.08mm
Total crude stocks fell for the 8th straight week while Cushiung saw its biggest build since October. On the products side, we continue to see huge builds…
Source: Bloomberg
Despite the small build this week, stocks at the critical Cushing Hub are at their seasonal lowest since 2008 (and lowest absolute level since 2014). ‘Tank Bottoms’ are here…
Source: Bloomberg
Quite a divergence between gasoline and crude stocks…
Source: Bloomberg
US Crude production dipper once again but remains very close to record highs…
Source: Bloomberg
WTI is holding up near $79 after the data…
Source: Bloomberg
World oil consumption will increase by a “robust” 1.4 million barrels a day in 2026, equaling the pace expected for this year and surpassing the predicted growth in supplies, the Organization of Petroleum Exporting Countries said in a monthly report on Wednesday.
In theory, that should allow Saudi Arabia and its OPEC+ partners to revive halted production, ultimately restoring roughly 2 million of barrels a day over the course of the next two years. However, the cartel’s bullish outlook is undermined both by signs of faltering economic growth in China and its failure to accurately predict demand last year.
Still, sweeping new US sanctions on Russia and the prospect of fresh restrictions from the incoming Trump administration targeting Iran could upend the outlook. The Paris-based IEA said earlier on Wednesday that OPEC+ could have scope to open the taps if those disruptions are sufficiently severe.
Tyler Durden
Wed, 01/15/2025 – 10:36
