WTI/RBOB Rise After Surprise Crude Inventory Draw

Both WTI/RBOB slid notably lower on the day amid equity market chaos, OPEC comments, and chatter about US production reaching 11m b/d sooner than expected. API printed an unexpected 1.05mm crude draw and WTI managed a small pop.

“The mood of the market will get a lot more positive as the stock market mood gets more positive,” Phil Flynn, senior market analyst at Price Futures Group Inc. in Chicago, said by telephone. Meanwhile, there’s concern about being “too long ahead of tonight’s API report.”

API

Last week’s surprise crude build – breaking the streak of draws – has prompted expectations of a build again this week from analysts, but API shows a draw. The big build in distillates was also very notable…

The move in oil prices is “linked to what’s going on in the broader markets,” Tamar Essner, an analyst at Nasdaq Inc. in New York, said by telephone. “Markets tend to move in lockstep. In panic situations, markets tend to move together in a coordinated way.”

But we do note that as stocks ramped into the close, WTI/RBOB did not but very modestly popped higher on the API data