WTI Spikes Above $70 After Huge Crude Draw

Amid east coast disruptions and Iran-related headlines, WTI spiked above $69 ahead of tonight’s inventory data, before extending gains when API reported a much bigger than expected crude draw (-8.4mm vs -1.75mm exp).

API

This is the 4th weekly crude draw in a row (and the biggest since July) but most notable was the huge build in gasoline – the biggest weekly rise in inventories since Dec 2017…

Bloomberg reports that East Coast motorists may see “dramatic” spikes in gasoline prices, according to AAA, as mass evacuations stretch supplies and Florence’s heavy rains imperil major fuel pipelines. Meanwhile, France and South Korea are shunning Iranian crude, forcing the Islamic Republic to effectively remove some oil from global markets.

Some investors “believe we are going to see a significant jump in gasoline prices”, said John Kilduff, a partner at New York-based hedge fund Again Capital LLC. “The supportive factors in this market still remain”.

WTI traded above $69 ahead of API and spiked up to within a tick of $70 on the crude draw…

And despite the biggest build since Dec 2017 RBOB also spiked.