What is happening with crude oil?
Crude Oil

WTI crude has soared through $50 overnightafter API reported a surprisingly large crude draw and helped by a plunging US Dollar and hope around US-China trade talks. Also, confidence is strengthening that the OPEC and its allies including Russia will curb output enough to counter booming U.S. supplies and avoid an oversupply.

API
Crude -6.127mm (-2.7mm exp)
Cushing +331k
Gasoline +5.5mm
Distillates +10.2mm

DOE
Crude -1.68mm (-2.7mm exp) Cushing +330k
Gasoline +8.066mm - biggest since Dec 2016
Distillates +10.611mm - biggest build since Jan 2015

API reported a major crude drawbut huge builds in gasoline and distillates (though the latter may have been catch-up to the official data's large builds in the prior week) and DOE confirmed the biggest distillates build in four years and a huge gasoline build, combined with a smaller than expected crude draw.

When the DOE data came out todayit caused oil to drop from an early high above 52.00 back to the 51.50 valuation, but once continued word came over the positive Chinese/US negotiations that were continuing tomorrow, oil chose to race back to its highs. Wish that could be said for grains, but for now, it has oil feeling good about self.

Note the chart below;crude oil will encounter extreme resistance near 54.00 like it found support new extreme low valuations at 42.00. The crude oil rally is now getting a little old for its young life, and look for it to stall here at 54.00.

We had been recommending when crude oilwas in the Mid-40s to price fuel needs through the rest of 2019.
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