US Crude Drawdown Supports Prices, US CPI, EIA Data & IEA Report Out Later

Oil prices are up during APAC trading today on the back of a reported crude drawdown. WTI is 0.7% higher at $78.57/bbl off the intraday high of $78.75. Brent is up 0.6% to $82.90 after reaching $83.07 but the benchmark struggled to hold breaks above $83. The USD index is down slightly.

• Bloomberg reported that there was a US crude inventory drawdown of 3.1mn barrels last week, according to people familiar with the API data. Gasoline stocks fell 1.27mn while distillate rose 349k. The official EIA data is released later today, as well as the IEA’s monthly report.
• OPEC members have been producing above quotas in 2024 but the group meets on June 1 to discuss whether to extend output cuts into H2. At the same time though, some large producers want their recognised capacity to be revised upwards. Saudi Arabia needs high prices for fiscal purposes while others want to produce more, which is likely to make agreement difficult.
• Later the focus will be on US April CPI (see MNI preview) which is expected to show a moderate improvement in the annual rates. Recent inflation-related data have printed to the upside and the Fed wants more evidence of slowing inflation before easing, which concerns oil markets re its impact on energy demand.
• There are also US April retail sales and real earnings data. The Fed’s Barr, Kashkari and Bowman speak. Euro area Q1 GDP/employment and March IP are released.