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Oil prices extended gains this morning following the cooler than expected CPI (supporting rate cuts and potential demand) following API's reported crude draw overnight.

Expectations were for a modest draw in crude from the official data.

API

• Crude -2.4mm

• Cushing -1.94mm

• Gasoline -2.55mm

• Distillates +972k

DOE

• Crude +3.73mm

• Cushing -1.59mm

• Gasoline +2.57mm

• Distillates +881k

The official data flipped the API data and showed a sizable crude inventory build last week (and gasoline build)…

Source: Bloomberg

The Biden admin added 339k barrels to the SPR (the lowest addition since early Dec 2023)

Source: Bloomberg

US crude production rose by 100k b/d back near record highs, even as the rig count continues to slide…

Source: Bloomberg

It looks like they flooded the market with imports – the largest in six years…

Source: Bloomberg

WTI tumbled on the surprise builds…

Along with OPEC+ plans to phase out voluntary output cuts after September, "we think this signals a cautious optimism from the organization when it comes to the trajectory of future supply/demand," says Rohan Reddy, director of research at Global X in emailed comments.

"The mid-$70s to low-$90s crude pricing we've seen in Brent over the past few quarters seems to be a range that OPEC is comfortable with, as the organization maintains its holding pattern," he adds.

Meanwhile, pump prices have fallen to three month lows as crude and gasoline prices have fallen…

But it's not helping Biden's poll numbers…