Crude Higher On Large US Inventory Drawdown, EIA Data Out Later

Oil prices are higher during APAC trading today driven by the industry-reported large US inventory drawdown. Brent is up 0.5% to $86.67/bbl, close to the intraday high of $86.74, while WTI is 0.5% higher at $83.19 after reaching $83.26. The USD index is up slightly.

• Bloomberg reported that US crude inventories fell 9.2mn barrels last week and distillate 740k but gasoline rose 2.5mn, according to people familiar with the API data. The official EIA figures are released later today.
• Geopolitics are worrying markets again but supply/demand fundamentals remain at the fore. They are concerned that Fed easing will be delayed further and weigh on fuel demand and at the same time the driving season is being monitored closely. Upcoming FOMC minutes and payroll data will be important in shaping the outlook. Demand in China, world’s largest oil importer, is also uncertain.
• On the supply side, Bloomberg reported that OPEC output rose in June but the market is also concerned that the hurricane season could impact US output.
• Later the Fed’s Williams speaks at the ECB’s Sintra conference and ECB President Lagarde gives the closing remarks. ECB’s Lane, Cipollone and de Guindos also appear. In terms of data, US June Challenger job cuts/ADP employment, services ISM/PMI, May final durable orders, trade balance, jobless claims and June FOMC minutes are released. There are also June European services/composite PMIs and May euro area PPI data.