OIL MKT DRIVERS: U.S. Stock Draw, Vitol’s Bearish Demand View

By Alex Longley

(Bloomberg)

Summary of what’s shaping the oil market on Wednesday: The API reported a decline in nationwide and Cushing inventories on Tuesday, ahead of EIA data later. Vitol struck a bearish tone on oil demand for both this year and next. Broader risky assets were recovering form a bumpy start to the week.

The API was said to report crude stockpiles fell 3.4m bbl last week, before EIA data later Wednesday

Cushing -1.64m bbl, gasoline -1.1m bbl, distillates +1.17m bbl

Vitol’s CEO said oil demand will increase by between 600k-650k b/d this year, noting that growth in China has moderated; still, he sees the market as under-priced given geopolitical risks in the Persian Gulf
Broader risky assets were recovering from the selloff at the start of the week, with European equities and U.S. futures moving higher
Crude stockpiles in Europe’s ARA region rose to 1.2m bbl last week, according to Genscape data
Plains said late Tuesday that the Cactus II pipe in the U.S. will enter initial commercial service next week
Saudi Energy Minister Khalid al-Falih and U.S. Energy Secretary Rick Perry discussed oil market conditions and stability in Washington

To contact the reporter on this story:
Alex Longley in London at alongley@bloomberg.net

To contact the editors responsible for this story:
Alaric Nightingale at anightingal1@bloomberg.net
Helen Robertson, Brian Wingfield