API Reports 4th Consecutive Inventory Draw But Crude Slides On Cushing Build

API reports a 2.3 million barrel inventory draw - a bigger draw than the prior week - extending the run to 4 consecutive weeks of drawdowns. The initial reaction was a pop higher, however the machines had not noticed that Cushing saw an inventory build (up 389k barrels) and that triggered weakness in WTI Crude...

Total inventory drewdown but Cushing saw a build...

Which is weighing modestly on crude prices...

Charts: Bloomberg

Comments

[Fahque Imuhnutjahb]

It's time to unleash the SPR, drive the prices to below $10/bbl, then restock at reduced prices; give this market the enema needed

to fertilize some green shoots.  Next target---PM's.

[adr]

I have a gas receipt from Labor Day last year. $2.69 at the pump, oil was above $80.

I also have a gas receipt from the first week of October. $2.05 and oil was above $70.

Today my local gas station is $2.65 and oil is $42.

Last year oil was double what it is now, but the pump price is exactly the same. Something ain't right.

[Fahque Imuhnutjahb]

Unless you're a refiner, then it's alright.  No lube for you.

[Occident Mortal]

Your car doesn't run on crude oil you dumbass.

[asteroids]

What about vehicles that run on diesel? Granted crude is not diesel, but it takes a lot less refining to get it to finished product. Doesn't it?

[Arnold]

http://www.wsj.com/articles/SB10001424052702304441404579123604287854862

Overseas first, domestic second.

[Arnold]

Occident Mortal

Taxes Mr Moron.

[Fahque Imuhnutjahb]

Were you calling me a dumbass, Accidental Moron?

[indygo55]

The driving season hasn't ended yet and the summer blends are more expensive than winter blends.

[Sam Spade]

Tomorrow's EIA data will likely show the last signficant drawdown of the year.  Drawdowns in the next few weeks will be 25-50% of tomorrow's number, and then we'll start seeing the first signficant inventory builds in October.  Cushing is currently 80% full, and was around 27% full this exact time last year.

[RealistDuJour]

Wrong.

There will continue to be drawdowns as long as the crack spread remains at record levels.  Refine the shit out of crude.  Sell the refined product to the middle men all until the margin runs down to the point that they've sucked out every penny to be made at these levels.  Refined product oversupply... that's someone else's problem.

[sun tzu]

Wrong. The refineries have to shut down for maintenance for winter blend. Then as driving decreases, there will be a glut in distillates building very quickly. That crack spread will be gone before you know it. Besides, the Saudis and Asians are building huge new refineries. European gasoline consumption peaked in 2006. 

Refined product glut is somebody else's problem? Who's problem will that be when the glut causes a 40% drop in wholesale fuel prices?

Thu Jul 2, 2015 9:28pm EDT

Rallying oil refining margins have ground to a halt in Asia. Currently at a 2015 low, they could drop another 20-30 percent this quarter, led by declining profits in diesel as supply from the Middle East adds to a global glut.

This could force refiners to cut production to avoid eroding their margins further in an already well-supplied market. Middle Eastern producers have added at least 1.2 million barrels-per-day (bpd) of capacity over the past two years.

http://www.reuters.com/article/2015/07/03/us-asia-refining-idUSKCN0PD03U...