Crude trades lower on the day but back from.....>

OIL: Crude trades lower on the day but back from worst levels, with WTI -$0.40 &

Brent -$0.25.

- The space was pressured by reports pointing to a large, surprise headline

crude stock build in the latest API inventory estimates, alongside surprise

builds in distillate and gasoline stocks, as well as a build in stocks at the

Cushing hub. Crude had drawn support on Tuesday, settling higher, supported by

tensions in the Gulf as the Yemeni Houthi faction struck Saudi oil facilities,

reportedly with a drone, temporarily closing the country's East-West pipeline

(2mn BPD est. current flow, 5mn BPD capacity). OPEC Sec Gen Barkindo pointed to

a need for stability in the Middle East, while stating that it is too early to

talk about extending production cuts. Tuesday also saw the release of the latest

monthly OPEC report, with the cartel's overall production level broadly

unchanged in the month of April, according to secondary sources. OPEC also

lifted its 2019 projection of demand for its crude by ~300K bpd. Russia's

Druzhba pipeline remains closed, with no firm indications of a re-opening date.

- Traders await the latest DoE inventory data, due later today.