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Oil prices ended higher today as stimulus hopes ebbed and flowed – more flowing than ebbing into the close – and the massive explosion in Beirut sparked fears of yet more instability in the region.

“Tensions are high and that just kind of puts a fine point on it,” said John Kilduff, a partner at Again Capital LLC. “Looks like there’s gonna be a draw in crude oil again, so we got that support as well.”

But after last week’s big surprise crude draw, analysts are expecting another significant draw…

API

• Crude -8.587mm (-3.35mm exp)

• Cushing +1.63mm

• Gasoline -1.748mm (-1.3mm exp)

• Distillates +3.824mm (+100k exp)

And for the second week in a row, crude saw a major inventory draw (and bigger than expected gasoline draw). Distillates continue to build however as flying habits (among other things) remain subdued to say the least…

Source: Bloomberg

WTI was hovering around $41.50 ahead of the API data and modestly extended gains after the print…

Ahead of tomorrow’s official EIA data, “oil again rejected the sub-$40-a-barrel area as talk starts to circulate that we could see a significant draw down in U.S. crude oil inventory,” said Phil Flynn, analyst at Price Futures Group, in a note.

“The whisper numbers are becoming louder as a historic drop in U.S. oil production, as well as a plunge in U.S. oil imports, could set the stage for another historical crude oil supply draw.”