Mid-Week Review – April 14, 2021

Oil Market Report – April 2021

A year on from what the IEA called “Black April”, one of the darkest months ever for world oil markets, fundamentals look decidedly stronger. The massive overhang in global oil inventories that built up during last year’s Covid-19 demand shock is being worked off, vaccine campaigns are gathering pace and the global economy appears to be on a better footing.

Crude Oil Prices Climb on Falling Stockpiles, Brighter Demand Outlook

Crude oil prices advanced modestly during the APAC morning session after gaining 1.36% overnight. The American Petroleum Institute (API) reported a larger-than-expected draw in crude oil inventories, sending prices higher. Stockpiles fell 3.608 million barrels for the week ending April 9th, compared to a 2.889-million-barrel decline forecast. This marks a third consecutive weekly fall in America’s crude inventories, pointing a recovery in refinery activity and underlying demand.

WTI Prices Unmoved By Small Crude Draw, Gasoline Build

The American Petroleum Institute (API) on Tuesday reported a draw in crude oil inventories of 3.608 million barrels for the week ending April 9. Analysts had predicted a draw of 2.889 million barrels for the week. In the previous week, the API reported a draw in oil inventories of 2.618 million barrels after analysts had predicted a smaller draw of 1.436-million barrels.

Oil Prices Rangebound As Long-Term Problems Emerge

Oil prices are still bouncing around depending on the news cycle, but with little definitive direction. In the words of Rystad Energy, “Prices are still locked in a sideways limbo, as bearish Covid-19 developments in some countries compete against bullish economic data and spending projections going forward in US and China”.