Today's edition of the Saxo Morning Call features the SaxoStrats team discussing the continuing weakness of the US dollar as commodity prices recover ground and in the wake of key US equity indices hitting all-time highs Thursday.
Squawk / 07 February 2018 at 11:45 GMT
Head of Commodity Strategy / Saxo Bank
Crude Oil has given back some of yesterday's late gains as we await the "Weekly Petroleum Status Report" from the EIA at 1530 GMT. Bouncing stocks and a surprise weekly inventory drop reported by the API supported the late sprint following a day mostly spent on the defensive. Not least after the EIA in their monthly Short Term Energy Outlook once again raised non-Opec production while keeping global demand steady. They now see US production already exceeding 11 million b/d this November, one year earlier than previously expected.
The short term outlook remains challenged by a seasonal slowdown in demand due to refinery maintenance in Europe, Asia and now also the US. Funds holding a record long have been net-sellers this week with the risk of more to come as the price moves further away from the recent peak
Table covering API results and EIA survey attached.
07 February
Ole Hansen Ole Hansen
EIA report showed rising stocks of oil, gasoline and products while production jumped by 332k b/d to reach 10.3m b/d. Results and initial market reaction attached
07 February
Ole Hansen Ole Hansen
EIA report in charts
07 February
Ole Hansen Ole Hansen
BBG comment: Crude inventories rose less than expected, up 1.9 million barrels, as higher refiner demand more than offset weaker exports. Cushing stocks continue to drain, and should push the Brent-WTI spread to narrow further. Meanwhile, refiners came roaring back, driving refined product inventories materially higher than expected. Gasoline rose by 3.4 million barrels, while distillate stocks grew by 3.9 million barrels.


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