Oil prices surged higher this morning  after a Ukrainian drone struck one of Russia’s biggest refineries and API's report overnight signaling shrinking US crude stockpiles.

API

DOE

The official data showed a smaller draw than API (but not a build as expected). Gasoline stocks plunged...

Source: Bloomberg

The Biden administration continued its 600-700k barrel weekly addition to the SPR (13th week in a row)...

Source: Bloomberg

US Crude production decline once again...

Source: Bloomberg

WTI was hovering just above $79.50 ahead of the official data and dipped below on the smaller crude draw...

And as crude prices rise, wholesale gasoline prices are soaring... and so are pump prices...

Source: Bloomberg

There’s a risk that premium gasoline prices could reach a multi-year high this year, said Mukesh Sahdev, head of oil trading and downstream research at Rystad Energy AS.

“There’s not a lot President Biden can do in time for the election, if this happens” he said.

“Strategic petroleum reserves are low, and there are few levers for the US government to pull to lower gasoline prices.”

Of course, we are sure Biden will blame gas stations if prices go up.