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Macro Forces Outweigh Larger Oil Inventory Draw

  • Crude oil prices have slipped circa 2% today as macro drivers work against it with Fed rate expectations and the USD on net pushing higher.
  • The decline comes despite an incerase after a larger than expected inventory draw in the latest EIA data. Gasoline cracks have fallen with a stock build and drop in implied demand while diesel cracks remain steady. Crude stocks declined more than expected with a large increase in refinery utilisation and with a recovery in exports after the dip last week. Cushing stocks drew for the seventh consecutive week.
  • WTI (CLK3) is -2.0% at $79.21 with a low of $78.46 pushing through the 20-day EMA at $78.83, with a more concerted push lower opening $77.35 (50-day EMA).
  • Within the CLM3, there is again reasonable activity at $70/bbl puts although the day's most active strike is at $80/bbl calls.
  • Brent is -1.9% at $83.20, off a low of $82.39 which came close to support at the 50-day EMA of $82.03.
  • Gold is -0.5% at $1994.95, still stuck in that range considerably below resistance at $2051.1 (Apr 17 high) and support at $1949.7 (Apr 3 low), creating scope for large daily moves in the interim.

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