Oil Steadies After Bearish API Report
The energy sector is poised for a mixed start, driven by some modest support in the crude complex while major equity futures were flat, taking a break after the S&P 500 and Nasdaq closed at record highs yesterday and ahead of an uptick in earnings. In deal news, shares of Anadarko Petroleum are trading sharply higher in pre-market trading after Occidental Petroleum put out a rival bid for the company worth $57 billion. The new bid is a 20% premium to $33B deal with Chevron and has the potential to make Occidental the largest producer in the Permian.
WTI crude oil futures were flat to higher in early trading, in line with Brent and off overnight lows, driven by last night's bearish API report and comments from both the IEA and Saudi Arabia. The industry report showed crude stocks jumped 6.86mm bbls last week compared to analyst consensus 800k bbls build while gasoline stockpiles rose ~2M bbls vs an expectations of a draw. The International Energy Agency commented that the markets are "adequately supplied" and that "global spare production capacity remains at comfortable levels. The comments were in line with remarks made by Saudi Arabia Energy Minister this morning who said global inventories are continuing to rise and he doesn't see a need to do anything immediately. Traders however are looking toward the EIA report later today as the next major catalyst. Read Full Article - Nasdaq, April 24, 2019