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Oil prices continued to slide from their spike higher yesterday morning with WTI testing $77. This decline is occurring as headlines suggest Saudi Arabia is expected to extend its 1 million barrel-a-day oil-supply cut into early 2024 amid faltering prices.

After last week's 'planned maintenance', this is the fist glimpse at the inventory and supply side in two weeks.

DOE (for the week ended 11/10)

• Crude +3.6mm

• Cushing +1.9mm

• Gasoline -1.5mm

• Distillates -1.4mm

API reported stockpiles rose 1.3 million barrels last week, while inventories in Cushing, Oklahoma, increased 1.1 million barrels.

Source: Bloomberg

Overall, over the two weeks since the last DOE data:

• Crude inventories rose 17.5m to 439.4m vs 422m in week ended Oct. 27

• Cushing inventories rose 3.5m to 25m vs 21.5m

• Gasoline inventories fell 7.8m to 215.7m vs 224m

• Distillate inventories fell 4.7m to 106.6m vs 111m

US crude inventories rose to their highest since August and stocks at Cushing rose to their highest since September…

Source: Bloomberg

In the last six weeks, the Biden administration has added a de minimums 20mm barrels to the SPR (though last week saw no addition)…

Source: Bloomberg

US Crude production remained at a record high of 13.2mm b/d while rig counts continue to decline…

Source: Bloomberg

WTI bounced off $777 after the data…

Last week, Saudi Energy Minister Prince Abdulaziz bin Salman blamed crude’s retreat on a “ploy” by speculators. The prince has sometimes unveiled surprise output cutbacks to confound short-sellers, and RBC Capital Markets LLC and Eurasia Group say this remains a possibility.

Finally, we note that gasoline demand finally appears to be making some meaningful improvement as drivers continue to see more relief at the pump.

The four-week average of gasoline product supplied has surged 660,000 barrels a day over the last five weeks, lining up fairly closely with a 14% slide in average retail gasoline prices from their 2023 peak in mid-September.