Oil Bounces After Surprise Inventory Draw

Tyler Durden's picture

While OPEC compliance remains key, it appears fundamental over-supply fears are mounting once again. Against expectations of a crude build and gasoline draw, API reported a surprise crude draw but smaller than expected gasoline draw. Cushing also saw a major drawdown and Distillates saw the biggest draw since Oct 2014. WTI and RBOB prices were marginally higher on the print.

 

API

  • Crude -884k (+3.3m exp)
  • Cushing -1.7mm
  • Gasoline -893k (-1.5mm exp)
  • Distillates -4.229mm

This surprise draw ends the 6 week streak of builds in crude. While gasoline did draw, it was smaller than expected, but Distillates saw the biggest draw since Oct 2014...

 

As a reminder, US crude inventories are already at a new record high...

 

As are gasoline inventories...

Bob Yawger, director of the futures division at Mizuho Securities USA Inc. in New York, said by telephone. "We’re expecting the API and EIA to report another supply build. The focus is returning to the reality that fundamentally we’re oversupplied."

WTI was lower (despite weaker dollar post-Fed) and RBOB higher heading into the inventory data but both gained as the drawdowns hit. No panic-buying algo though.

“The big question is, will the Saudis cut even more to maintain the price,” James Williams says, an economist at London, Ark.-based energy-research firm WTRG Economics.

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Hohum's picture

Imports must be down this week, but don't fear.  US drillers love drilling at a price below cost, as long as there is credit.

GUS100CORRINA's picture

More manipulation ... 

Probably delivered some more TANKERS so OFFSHORE STORAGE could be increased to make numbers look better.

OIL GUYS had an emergency meeting ... CRISIS IMMINENT UNLESS WE TAKE ACTION.

jamesmmu's picture

Sell at the good news, tomorrow will be interesting. For the past few weeks, oil stay flat or marginal higher depiste very bad news, hedge funds's record long bets not working out, will exit soon.

GUS100CORRINA's picture

I agree ... they needed some manipulated "GOOD NEWS" to allow the leverage to be unwound in an orderly fashion or we might have been looking at a BLACK SWAN type of event.

El Hosel's picture

Lets ask Alan Greenspan and Denny Gartman .... The suspense is killing me, wich way will it go.

BandGap's picture

They topped off the tanks for the South China Sea Cruise Extravaganza.

 

libfrog88's picture

Another surprise? How surprising! Every month there is one. This is great.

LawsofPhysics's picture

LOL!!!  Discussing "prices" in the absence of mechanisms for true price discovery is a fool's errand.  What does Goldman Sachs want the price to be?

RealistDuJour's picture

15 minute intervals to show "no panic-buying"...  What, were the 1 minute and 30 second interval charts broken, lol?

LawsofPhysics's picture

exactly. To be fair, this is an HFT trading market, where are the microsecond intervals...?

blueskyranch's picture

How the fk do 'distilates' get drawn down overnigt? FK this is a pure and simple statistical hand job. FK we suck the Saudi's big stick. We manipulate our data to give the sodomites a boost. FK we are just bend-over buddies. I'm all tired of this fake news. The whole world is rigged...

 

//rant off but subject to immediate restart. FK

mrvco's picture

Every freaking week or two there is either a "surprise inventory draw" or a "surprise inventory build"... at what point do repeated surprises quit being surprising?

south40_dreams's picture

Unexpected

Surprised

Rigged

Manipulated

 

AlexCharting's picture

So, today I apparently bought protective puts like an idiot.... let it be.