WTI Holds Near 3-Month Highs As Cushing 'Tank Bottoms’ Loom

Oil prices kicked off 2025 with strong gains as WTI pushed above $73 – its highest since October – as it broke above a key technical level after API reported a small crude draw last night. The prices gains came despite a weak China PMIs (which potentially prompots more hope for further stimulus), but was helped by a modest rise in US PMIs.

„President Xi Jinping’s statements promising more proactive policies to stimulate growth have raised expectations of increased energy demand. While recent data indicates marginal growth in the country’s manufacturing activity, sectors such as services and construction have started showing signs of recovery, suggesting a gradual strengthening of China’s economy,” said Antonio Di Giacomo, senior market analyst at XS.com, in a note.

This morning we get the final look at supply and inventory data from the DOE:

“A draw is likely because producer and storage operators generally try to empty their tanks by year-end for tax reasons,” said Robert Yawger, director of the energy futures division at Mizuho Securities USA.

API

• Crude -1.4mm

• Cushing +300k

• Gasoline +2.2mm

• Distillates +5.7mm

DOE

• Crude -1.18mm

• Cushing -142k

• Gasoline +7.72mm — biggest build since year-end 2024

• Distillates +6.41mm — biggest build since year-end 2024

The official data confirmed API’s with the sixth straight weekly crude drawdown (and another draw at the Cushing hub) but product stocks soared higher (as year-end tax-related issues likely affected them)…

Source: Bloomberg

Including the addition of a further 260k barrels to SPR, total US crude inventories declined for the sixth straight week…

Source: Bloomberg

Stocks at the crucial Cushing hub slipped closer to 'tank bottoms’ – lowest since Oct 2023…

Source: Bloomberg

US Crude production dipped very modestly off record highs…

Source: Bloomberg

WTI surged above its 100DMA to its highest since October ahead of the official inventory data

Source: Bloomberg

WTI posted the smallest annual price move in almost two decades last year, and investors are bracing for an oversupply this year, making it harder for OPEC+ to revive idled production. Still, the unpredictability of a second presidential term by Donald Trump is clouding the outlook.