Yesterday was a fun day for crude.
As documented here extensively, oil initially plunged on reports that Riyadh raised output to over 10m b/d in February, reversing 1/3 of the cuts made in January.
Oil promptly plunged.
Apparently surprised at just how closely the market still listens to the kingdom, Riyadh pulled a “just kidding,” and tried to play the whole thing off. Here was the result:
As if that wasn’t enough “crude” excitement for one day, we got the latest API numbers which showed a surprise inventory draw. To wit:
Crude inventories fell 531k bbl last week
So that’s notable because i) a U.S. crude draw would be first decline since December when compared with EIA data, and ii) the median forecast for today's EIA print is a 3.13m bbl build. Naturally, crude spiked on this news:
Well, as we wait patiently to see if the EIA numbers confirm the API draw, Goldman wants you to know two things: 1) Tuesday's headlines out of Saudi Arabia were really a non-event, and 2) the bank's baseline is that contrary to reports (but consistent with Heisenberg's own thinking) OPEC will not in fact extend the pr
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