DOE crude oil inventories 4590K versus 8800K estimate

DOE crude oil inventories

The crude oil inventory showed a lesson expected build in inventories.  Gasoline inventories at a greater than expected drawdown, while distillates showed a greater than expected build.

The numbers are showing:
  • crude oil inventories 4590K vs 8800K estimate
  • gasoline inventories -3158K vs 1000K estimate
  • distillates 9518K vs 3000K estimate
  • Cushing 2068K vs 3637K last week
  • US refinery utilization 0.9% versus 0.4% estimate and 2.0% last week
  • crude oil implied demand 16956 versus 16118 last week
  • gasoline implied demand 7195.1 versus 6764.3 last week
  • distillates implied demand 4058.3 versus 4489.6 last week
Overall better demand this week and lower builds/supply.
WTI crude oil futures are trading around $24.00 or -2.4%. The high price reached $26.08 while the low extended to $22.58 and volatile trading.
FYI the private data from the API show the following last night:
API data

China considers dropping numerical GDP growth target for 2020 – report

Bloomberg reports, citing people familiar with the matter


The report says that Chinese leaders at the upcoming National People’s Congress will unveil a description of the goal for GDP instead, although a final decision has not been made on how to characterise the target.

Adding that such a move would free up policymakers from the obligation of having to issue a significant amount of stimulus in order to meet a certain growth level as long as employment conditions remain stable.
China has always issued a growth target and to no one’s surprise, they have consistently achieved said target year after year. Last year, it was a range of 6.0% to 6.5%.
The National People’s Congress will take place later this month on 22 May.

Russia deputy energy minister: No reasons for oil to fall to or below zero now

Comments by Russia deputy energy minister, Pavel Sorokin

  • We can see first signs of recovery in the oil market
  • Return to pre-virus oil demand will take a long time
  • Nobody is interested in breaking OPEC+ deal now
  • Full compliance may be difficult for some countries
  • Violation of OPEC+ deal would bring new collapse in oil
The fall to negative prices in the May contract was brought about by a confluence of black swan events working together. It was pretty much the perfect storm that will probably never be repeated in our lifetime ever again.
Anyway, it will be ironic if Russia is the one to not fully comply to the OPEC+ deal in the near future and bring about added concerns about the oil market.
For now, oil prices are continuing to stabilise and recover with WTI crude up 3.5% on the day to $25.40 currently after a monstrous surge higher in overnight trading.

China reportedly won’t prioritise inviting international experts to investigate source of coronavirus

AFP reports on the matter

The headline cites Beijing’s ambassador to the UN in Geneva, in saying that China will not prioritise inviting international exports in to investigate the source of the coronavirus until after the pandemic is beaten.

Just be reminded that China did say that they will be open to working with the WHO on this earlier today though. Then again, that in itself isn’t a strong vote of confidence considering the WHO’s current reputation among the international community.
Even if China may not have ill intentions on this matter, it is hardly comforting and just feeds sentiment of a divide between China and the Western world. Back to this:

UK April construction PMI 8.2 vs 21.7 expected

Latest data released by Markit – 6 May 2020

  • Prior 39.3
Construction activity in the UK crashes to an all-time low last month as clients freeze spending plans amid the fallout from the virus outbreak and business shutdowns. The real worry here is that this could lead to long-term disruptions and cause construction activity to be more subdued for a longer period than the drop seen in April. Markit notes that:

“The rapid plunge in UK construction output during April stands out even in a month of record low PMI data for the manufacturing and service sectors. Widespread site closures and business shutdowns across the supply chain meant that vast swathes of the construction sector halted all activity in response to the COVID-19 pandemic.

“Around 86% of survey respondents reported a fall in business activity since March, while only 3% signalled an expansion. House building and commercial work were unsurprisingly the hardest hit, but civil engineering activity also fell at by far the fastest pace since the survey began in April 1997.

“A drop in construction activity of historic proportions in April looks set to be followed by a gradual reopening of sites in the coming weeks, subject to strict reviews of safety measures.

“However, the prospect of severe disruption across the supply chain will continue over the longer-term and widespread use of the government job retention scheme has been needed to cushion the impact on employment. Looking ahead, construction companies widely commented on worries about cash flow, rising operating costs and severely reduced productivity, as well as a slump in demand for new construction projects.”

Eurozone April final services PMI 12.0 vs 11.7 prelim

Latest data released by Markit – 6 May 2020

  • Composite PMI 13.6 vs 13.5 prelim
The preliminary release can be found here. A tad better than initial estimates but again, it doesn’t take away the fact that the euro area economy saw a record contraction in business activity during the month of April. A summary to wrap your head around:
Markit notes that:

“The extent of the euro area economic downturn was laid bare by record downturns in every country surveyed in April, with output falling at unprecedented rates across the region’s manufacturing and services sectors.

“With a large part of the region’s economy shut down while COVID-19 infections spiked higher, the economic data for April were inevitably going to be bad, but the scale of the decline is still shocking. The survey data are indicative of GDP falling at a quarterly rate of around 7.5%, far surpassing the worst decline seen in the global financial crisis. Jobs are also being lost at a rate never previously seen.

“Hopefully, with coronavirus curves flattening and governments making moves to ease lockdown restrictions, many sectors should start to see output and demand pick up. The process will be only very gradual, however, as governments juggle between reviving economies and preventing a second wave of infections. Most companies will inevitably need to work at levels well below full capacity and sectors such as retail, travel, tourism and recreation – already the hardest hit – will continue to be badly affected by social distancing.

“While the rate of decline may ease in coming months, we do not expect to see any material signs of recovery until the second half of the year, and it is likely to be several years before the output lost due to the 

Go to top