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Oil prices ended relatively unchanged today, despite some significant swings intraday as investors worried that global demand could be dented by surging COVID-19 cases, even though supplies are tightening and vaccination rates rising.

“The API inventory data may jolt crude prices back into life,” said Craig Erlam, senior analyst at OANDA.

API

• Crude -4.728mm (-2.55mm exp)

• Cushing -126k

• Gasoline -6.226mm

• Distillates -1.882mm

Despite last week’s surprise build, analysts expected crude to resume its series of inventory draws in the last week. Both crude and gasoline stocks saw a bigger than expected inventory drawdown…

Source: Bloomberg

WTI was hovering around $71.80 ahead of the API data and rallied from there on the big draw…

“The problem right now seems to be the Delta variant of the coronavirus, which is holding the market back even though all the evidence right now suggests a dramatic tightening of supplies,” said Phil Flynn, senior analyst at Price Futures Group in Chicago.

He said that tightness otherwise should cause prices to “break out to the upside.”