The Commodities Feed: Reopening euphoria

By ING Economics10 days ago

Your daily roundup of commodity news and ING views


Optimism around the re-opening of economies in Europe, along with the US has proved constructive for the oil market. ICE Brent yesterday traded as high as US$69.50/bbl at one stage, settling just short of 2% higher on the day. Clearly, the market is focusing more on re-openings, rather than the latest Covid-19 wave from the world’s third-largest oil consumer, India. Part of the reason for this is the fact that the Indian government appears reluctant to impose a national lockdown, despite calls for one. However, if we were to eventually see a national lockdown imposed, this would likely hit sentiment.


Overnight, the API released its weekly inventory numbers, which showed that US crude oil inventories declined by 7.69MMbbls over the last week, which was much larger than the roughly 2MMbbls draw the market was expecting. This should provide some further immediate upside momentum for the market. Changes in refined product inventories were also constructive, with gasoline and distillate fuel oil stocks reported to have fallen by 5.31MMbbls and 3.45MMbbls respectively. Later today, the more widely followed EIA report will be released, and a similar crude number would mean the largest weekly draw since January.


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