WTI Steady After Biggest Cushing Crude Build In 3 Years; Imports From Venezuela Highest Since 2019

Oil prices remain lower this morning, following the US proposal for a ceasefire with Iran, but off the lows following Iran’s rejection.

“From the Iranian perspective, Trump’s actions this week have demonstrated that the US can be pressured when Iran threatens further escalation,” said Arne Lohmann Rasmussen, chief analyst at A/S Global Risk Management.

Futures had already pared losses as Tehran fired a new wave of missiles at Israel, and signaled little willingness to compromise. Iran’s armed forces added to a stream of messaging that ruled out ceasefire talks, according to state-run IRIB News. They added that they wouldn’t allow oil prices to return to their previous levels until all threats against the country were removed.

Overnight saw API report a modest rise in crude and refined product inventories and while oil prices are really more attuned to the geopolitical headlines currently, we’re keeping our eyes on the domestic supply and demand for any signs of an actual impact locally.

API

• Crude +2.35mm

• Cushing

• Gasoline +528k

• Distillates +1.39mm

DOE

• Crude +6.93mm (-200k exp)

• Cushing +3.42mm – biggest weekly build since Jan 2023

• Gasoline -2.59mm

• Distillates +3.03mm

US crude stocks rose for the 5th straight week with inventories at the Cushing Hub soaring by 3.4mm barrels – the biggest build since Jan 2023. Refined products were mixed with Distillates stocks up bigly while Gasoline stocks fell for the sixth straight week…

Source: Bloomberg

For the 5th week in a row, there was no addition (or drawdown) for the US SPR.

Total Cushing stocks are their highest since July 2024 while total gasoline stocks tumbled to their lowest since the start of the year…

Source: Bloomberg

Crude imports from Venezuela surged to their highest since 2019…

US Crude production remains ‘near’ record highs – but despite a rising rig count, production is not increasing…

Source: Bloomberg

No signs of gasoline demand destruction so far. Finished motor gasoline product supplied came in at 8.9 million barrels per day for the EIA week, a week-on-week increase of 196,000 barrels per day.

WTI was trading around $89 ahead of the official inventory data (at the upper end of the overnight session’s range)…

“In the past 24 hours, the Trump administration has been signaling both to concerned citizens, policymakers, allies, adversaries, and perhaps most importantly markets, that there may be an end in sight sooner than the president himself had let on just about a week ago,” Behnam Ben Taleblu, Iran program senior director at the Foundation for Defense of Democracies, told Bloomberg TV.

“A lot of that is hand-holding, particularly for energy markets.”

Perhaps this is why…

Not a great backdrop for the Midterms (admittedly six months away).