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Oil Jumps Above $61 After API Shows Larger-Than-Expected Inventory Draw

Tyler Durden's picture




 

Following last week's biggest inventory draw since September 2014 of 3.88 million barrels, expectations were for a relatively small 250k draw this week (with builds in gasoline and distillates). API reported a considerably bigger than expected 2 million bbl draw (with a 827k draw from Cushing). WTI Crude has pushed up above $61 on the news.

 

A 2nd draw in a row...

 

Pushed WTI up over $61...

 

Charts: Bloomberg

 

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Tue, 05/12/2015 - 16:44 | 6086442 Osmium
Osmium's picture

$4.00 Gasoline, here we come!

Tue, 05/12/2015 - 16:44 | 6086448 kowalli
kowalli's picture

mb more

Tue, 05/12/2015 - 18:05 | 6086895 Stoploss
Tue, 05/12/2015 - 17:15 | 6086619 sun tzu
sun tzu's picture

Cushing will be empty by June and oil at $110 due to shortages

Tue, 05/12/2015 - 16:44 | 6086445 BoPeople
BoPeople's picture

Maybe the drop of 50% in the oil market was a needed healthy re-set.

They cannot seem to bring themselves to do the same thing with equities... even though it is needed.

Tue, 05/12/2015 - 16:44 | 6086446 Groundhog Day
Groundhog Day's picture

Load em up on the buffet trains and wreck the trains.  collect insurance money..  make money on long oil contracts,,, making money is easy for ol warren

Tue, 05/12/2015 - 16:46 | 6086458 jubber
jubber's picture

So did Nigeria and Angola sell their 80 million barrels earlier at $60?  What a farce

Tue, 05/12/2015 - 16:52 | 6086482 curbyourrisk
curbyourrisk's picture

I think it's all bullshit.  There is still ZERO demand and despite what articles are saying, there is inventory EVERYWHERE.

 

I think this TPTB playing games, with the intent on driving prices higher.  Who says we don;t have price controls here in America?

Tue, 05/12/2015 - 17:02 | 6086531 LawsofPhysics
LawsofPhysics's picture

Maybe, maybe not. In the absence of true price discovery you cannot say shit.  The real price could easily be $500 dollars per barrel as much as it could be $5.

One thing is for sure, we are still burning more than we produce, period.  Zero demand you say?  I don't consider things that we have to import to not be in demand...

Tue, 05/12/2015 - 17:19 | 6086642 sun tzu
sun tzu's picture

Oil is a global commodity. Just because we import doesn't mean there is more global demand than supply. We imported oil when it was $5 back in the 1980's. I've never seen oil at $500 and the last time it reached $140, there was a collapse in demand. When we stayed around $100 for two years, supply overwhelmed demand. I'd wouldn't mind seeing oil hit $500. It might stay there for a few days before it collapsed back to $50 because 99% of the population wouldn't be able to fill up their tanks. 

Tue, 05/12/2015 - 18:32 | 6087036 wrs1
wrs1's picture

It's not fungible though.  Oil isn't the same the world around and so that is why it's not as easy to sell or price as say gold and even that isn't very popular in the US.  However, oil is needed the world over as are refined products.

Tue, 05/12/2015 - 20:02 | 6087360 44_shooter
44_shooter's picture

16 weeks of builds with NO draws. 16 weeks of adding to inventory topping out  around 108 million barrels.  Price won't move below $55/barrel.  2 weeks of draws 3.8 million & 2 million barrels - just 6 million barrels (still leaving inventory @ over 100 million barrels) and the fucking price goes up to $61? 

 

Its so much bullshit that you can't smell the bullshit over the smell of the bullshit.

 

 

Tue, 05/12/2015 - 16:53 | 6086487 wrs1
wrs1's picture

Is Cushing full yet?  When will oil be $20?

Tue, 05/12/2015 - 17:32 | 6086706 Flakmeister
Flakmeister's picture

When will you find a clue?

Tue, 05/12/2015 - 18:30 | 6087017 wrs1
wrs1's picture

More like when will the article writers here admit defeat?  I will keep asking since I think the articles all predicted Cushing full by now and oil $30 or less.  I am loving the bigger royalty checks now.  April production payments were $45/bbl at the wellhead, up from $39 in March.  Really only half what I was getting last July and August but it's moving in the right direction.  I expect $75 by June.  We will see it if the imports continue to stay below 7mmbbl/day for very long.  That is the number I am most interested in tomorrow.  If it's 6.5mbbl/day again like last week, the draw will be 5mmbbl for the week.  However, imports are the wildcard of late.

Tue, 05/12/2015 - 16:58 | 6086508 q99x2
q99x2's picture

FED software.

Tue, 05/12/2015 - 18:02 | 6086882 ElixirMixer
ElixirMixer's picture

The majors have figured out what the financial firms figured out in the 1970s, and that is that volatitility is the easiest way to make money. If they were smart, they would keep oil prices down long enough to acquire the small and mid-sized shale oil players at bargain prices. When oil prices go up again, the majors are much better at practicing restraint. 

Tue, 05/12/2015 - 22:12 | 6087795 Gohigher
Gohigher's picture

Not too far off, actually.  HFunders are under pressure to spend several tens of billions they have amassed tagged for energy aquisiton and expansion but they are telling their investors that asset prices are still too high and expect more blood. When you see that money being spent in a big way, not the nickle and dime stuff so far this year, that IS your bottom. @ 4 more months and the pricing of the next round of hedging will be the pivot to Chapter whatever........

Tue, 05/12/2015 - 19:11 | 6087209 1033eruth
1033eruth's picture

Shit yeah, between lower rig counts and "bigger than expected" inventory draws, we'll have it back up to $100 a barrel in no time.  SUPPLY AND DEMAND DOES NOT MATTER, nor has it for quite some time.

The march to $100 a barrel continues and every week it will be a new "reported excuse".   

Tue, 05/12/2015 - 22:04 | 6087782 Gohigher
Gohigher's picture

VVVVVVVVVVVVVVVVVVVVV

ThERE'S YER CHART FOR THE NEXT 4 MONTHS.

HIGH= 65 worthless FRNs

LOW = 48 worthless FRNs

September you see a Greece fire, get kicked in the Donbass, bamboo whack the Panda AND Shia' the bed.

4 dollar gasoline price discovery. THIS TIME it is different....... ST/FED gov will have the tax increases in place by August......

Tue, 05/12/2015 - 23:26 | 6088024 JoWazzoo
JoWazzoo's picture

WTF happened at 5 PM?  And 6?  Sigh .... see if EIA confirms tomorrow.  It did last week.

 

http://finviz.com/futures_charts.ashx?t=CL&p=m5

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