Oil prices jumped this morning after a quiet overnight session thanks to the dovish CPI print exuberance.

“The petro-nations’ somewhat surprising supply cut last week triggered a shift in sentiment,” said Norbert Ruecker, head of economics at Julius Baer Group Ltd. in Zurich.

“Beyond the geopolitical noise, the ongoing fundamental trends seem robust.”

But all eyes remain on inventories for signs of trouble as recession anxiety grows.

API

DOE

After API's reported small build, analysts still expected a draw in crude stocks (extending the recent trend) but they were wrong as the official data showed a small 597k build. Stocks at the Cushing hub slipped for the 6th straight week and products saw very small draws...

Source: Bloomberg

The so-called 'adjustment factor' actually turned red this week...

Source: Bloomberg

Crude stocks remain seasonally high...

Source: Bloomberg

US Crude production rebounded to cycle highs despite he slowing rig count...

Source: Bloomberg

WTI was hovering around $82.50 ahead of the official data, and held steady after...

Finally, after last week's OPEC+ 'rebellion', Energy Secretary Jennifer Granholm confirmed that the US plans to refill the Strategic Petroleum Reserve to levels seen prior to President Joe Biden’s historic release last year following Russia’s invasion of Ukraine.

The Energy Department “will look to take advantage of prices if it is advantageous to the taxpayer in the rest of the year, but it’s a lot to refill,” Granholm said during remarks at an energy forum held by Columbia University.

But she appears to be full of shit as the Biden admin actually drained the SPR for the second week in a row (the 1.6mm barrel draw more than offset the 600k build in commercial stocks)...

WTF Jenny?

WTI’s prompt spread - the difference between its two nearest contracts - affirms that the oil market is tightening. It has swung to 8 cents a barrel in backwardation, the widest this year on a closing basis.