Global equities have been trading with a view that QE3 will continue at its current rate. The EMI Global Equity Index increase by 0.28% over the last 24 hours. The year to data gain widened to 3.9% or the highest weekly level so far this year. Global equities have been supportive for oil prices this week.
Tuesday's API report was mixed with a bias to the bearish side. Total crude oil stocks increased more than the expectations by 5.9 million barrels. The API reported a surprise build in gasoline inventories and a larger than expected draw in distillate fuel stocks. Total inventories of crude oil and refined products increased strongly on the week.
The oil complex is mixed as of this writing with WTI lower and the rest of the complex higher heading into the EIA oil inventory report to be released at 10:30 AM EST Wednesday. The market is usually cautious on trading on the API report and prefers to wait for the more widely watched EIA report due out this morning. On the week gasoline stocks increased by about 0.7 million barrels while distillate fuel stocks decreased by about 2.7 million barrels.
The API reported Cushing crude oil stocks decreased by 2.2 million barrels for the third weekly build in a row. The API and EIA have been very much in sync on Cushing crude oil stocks and as such we should see a similar draw in Cushing in the EIA report. Directionally it is bullish for the Brent/WTI spread.