Crude Spikes After Massive Inventory Drawdown (Most Since Jan 1999)

Tyler Durden's picture

Following last week's 2nd build in a row (and 5th of last 6), API reports crude inventories collapse over 12 million barrels - the most since Jan 1999 (against expectations of a 905k barrel build). Crude had rallied on the day early hovering aroung $45.50 for a few hours before the data hit, but spiked above$46 after the print.

 

API

  • Crude -12.08mm (exp +905k)
  • Cushing -0.7mm (exp -900k)
  • Gasoline -2.388mm (exp -750k)
  • Distillates +944k

The biggest crude inventory draw since Jan 1999... We presume this massive drop is some reflection of the shut-ins from the Gulf thanks to the storms. NOTE - in 2013, there was a 10mm-plus barrel draw during a heavy storm season in The Gulf and also in 2009 during a heavy storm season.

 

Now all eyes will be on tomorrow's DOE data - better not disappoint after this.

After treading water for the last 5 hours - very oddly - crude's reaction to the API data was expectedly a knee-jerk higher towards the Saudi-Russia statement failure highs...

 

“We’ll need to see a significant shock to the market to break out of this range over the next several weeks” leading up to OPEC talks later this month, Michael Tran, a commodities strategist at RBC Capital Markets in New York, says by phone, and we may have just got it.

 

Charts: Bloomberg

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HedgeAccordingly's picture

Hot time, summer in the city! 60615 gasoline is $3.79 gallon for premium!

Looney's picture

... "Crude Spikes"

Who broke Dennis Gartman?   ;-)

Looney

Butter-Cup's picture
Butter-Cup (not verified) HedgeAccordingly Sep 8, 2016 12:57 AM

My last month paycheck was for 11000 dollars... All i did was simple online work from comfort at home for 3-4 hours/day that I got from this agency I discovered over the internet and they paid me for it 95 bucks every hour...  Try it yourself... http://www.14earnpath.com

Butter-Cup's picture
Butter-Cup (not verified) HedgeAccordingly Sep 8, 2016 12:58 AM

My last month paycheck was for 11000 dollars... All i did was simple online work from comfort at home for 3-4 hours/day that I got from this agency I discovered over the internet and they paid me for it 95 bucks every hour...  Try it yourself... http://www.14earnpath.com

abyssinian's picture

Gartman! $55 oil!

USofAzzDownWeGo's picture

Just AMAZING how fartman gets it WRONG again, 100%. Can we please get back to posting what he says every single day so we can do the exact opposite and get rich here? 

Hohum's picture

Crude imports probably under 8.0 M barrels per day.

Here2Go's picture
Here2Go (not verified) Sep 7, 2016 3:58 PM

Paper oil (based on reports from well productions from Saturn's moon Titan because that's where the fossilized dinosaur deposits are)... What a concept!

 

Shucks, I wish I'd a been 'homeschooled'... I might be RICH!

YHC-FTSE's picture

Never really looked at API crude so somebody help me out here. Crude inventory was expected to go up by 905k barrels but instead was found to be down by 12 million barrels? Is that right? If so, I'm wondering who has been using that much oil in such a short space of time. Where did this sudden massive demand come from? The storage facilities are already brimming full so it had to have been used so who burned this much oil in such a short space of time? Or is this complete bullshit?

Hohum's picture

Two words: imports down.  Two more words: a lot.

YHC-FTSE's picture

That makes sense, but I just did the maths and imports are actually slightly up and this article asserts that the draw may have something to do with the lack of production in The Gulf (I'm going to assume the article means the Gulf of Mexico, since no storms are reported in the Arabian Gulf) due to storms.

According to the EIA (US Energy Information Administration), imports of crude per day has been steady right to the end of August and the average US oil crude imports from OPEC & Non-OPEC countries average 236 million barrels per month (to June 2016). The figures for July and August have not been published but I can figure out from the latest weekly imports of crude that August imports of crude is going to be more than the 228 miilion barrels imported in June.

Crude Oil domestic production is not down either (to 26th August 2016). So, WTF happened? A bit weird.

Hohum's picture

You'll likely see in the EIA report tomorrow that imports (4 week average) are up about 10% year over year.  And year over year, US oil production is down 10-15%.  The drop this week has nothing to do with an incremental change in US oil production.

In the weekly report, imports have been about 8.5+ M barrels per day.  I'd be surprised if it were that high this week.

YHC-FTSE's picture

Thanks. I hate it when the figures appear to contradict a narrative and just have to check for myself. I'll have to wait and check again I guess.

flying dutchmen's picture

its really not that big of a deal.. the gulf storm redirected ships so they could not offload cargo. there will be a big build coming in the weeks to come.

redc1c4's picture

i wonder where they dumped it all?

you'd think an oil slick that big would make the news...

coast's picture

API notes that hillary and obama did nto fart today, oil spikes to $60

whatamaroon's picture

Glad I filled up the truck @ $1.81 today.