Crude Higher Again As Stocks Decline & Market More Optimistic On Demand

Oil prices are up another 0.4% after rising around 1.5% on Tuesday after API data showed a large US stock drawdown. Better risk sentiment is also supporting crude. WTI is up 0.4% to $81.50/bbl, close to the intraday high of $81.61. It is approaching resistance at $81.75. Brent is 0.3% higher at $85.75, which has opened up the bull trigger at $88.10. Oil has rallied despite the stronger dollar (USD index +0.2%).

• Bloomberg reported that API data showed a massive 11.5mn barrel US inventory drawdown in the latest week after -2.4mn, according to people familiar with the numbers. Distillate rose 2.5mn and gasoline +1.4mn. The official EIA data is out later today.
• Markets are generally more optimistic as they speculate that there will be more economic stimulus in China and that the Fed has done tightening. Key US payrolls are out Friday and China PMIs on Thursday.
• While markets are more positive this week on the demand outlook, Bloomberg is reporting that Russian seaborne crude shipments may have reached their highest in 8 weeks. Also talks continue to ease sanctions on Iran and Venezuela’s oil.
• US ADP employment for August, July trade balance and updated Q2 GDP are released today as well as the European Commission August survey and preliminary August German and Spanish CPIs.