Oil price: WTI $49.56 +39c, Brent $52.70 +56c, Diff -$3.14 +17c, NG $2.88 +6c

You can’t keep a good thing down and crude bounced again yesterday and is up again in early trading today. Interestingly Brent is the poster boy, now three bucks above WTI and in backwardation for the first time for a while, someone believes that the Saudis mean what they say…

The EIA inventory figures helped, a crude draw of 6.5m barrels validated the API stats and were more than twice the 2.4m guess from the teenage scribblers on Wall Street. Refinery utilisation was up yet again, now at over 96% with throughputs of over 17.5m b/d, the highest since September 2005. Offsetting that was an unsurprising  build in gasoline stocks of 3.5m which was disappointing although we are slowly inching towards the end of the driving season. Distillates however got everyone out of jail, a draw of 1.73m was better than expected and showed that product demand in this area is very strong still.

The IEA also produced their STEO, always a good read and is now more bullish about oil for the first time in a while. They have supply and demand neutral in 1H 2017 but expect a call on Opec of 32.88m b/d in the 2H, up 720/- half on half and should adherence be high then there is a modest opportunity for optimism.

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