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Oil prices plunged today, closing well below the pre-Israel levels and breaking below the 200DMA for the first time since July as war risk-premia evaporate and demand fears resurgent.

China trade data showed imports disappointing. At 11.5 million barrels a day, imports were up slightly versus September but remained around 1 million barrels a day below levels seen in the summer, noted Carsten Fritsch, commodities analyst at Commerzbank, in a note.

Can the API data turn the trend?

API

• Crude +11.9mm (+200k exp) – biggest build since Feb 2023

• Cushing

• Gasoline -400k (-500k exp)

• Distillates (-2.0mm exp)

API reports that crude inventories soared by 11.9mm barrels last week, the biggest weekly build since Feb 2023.

Source: Bloomberg

WTI hovered around $77.50 ahead of the print and extended the day's losses after…

Finally, we note that the U.S. Department of Energy announced late Monday a "supplemental solicitation" for up to 3 million barrels of oil for delivery in January 2024 towards replenishment of the SPR. That's a "small volume as compared to what has been liquidated since January 2021," said StoneX's Kansas City energy team.

Additionally, the EIA report – usually released tomorrow (Wednesday) at 1030ET – will be delayed until next week due to planned systems upgrades.