WTI/RBOB Surge After Massive Gasoline Draw (Despite Record Crude Glut)

Tyler Durden's picture

Following API's reported massive build in crude (and draw in gasoline), DOE confirmed the extreme moves with a major 8.2mm crude build and a massive 6.56mm draw in gasoline (the biggest since April 2011). US Crude production rose once again - to 13-month-highs.

API

  • Crude +11.6mm (+1.4mm exp)
  • Cushing +788k
  • Gasoline -5.00mm
  • Distillates -2.9mm

DOE

  • Crude +8.21mm (+2mm exp)
  • Cushing +867k (+406k exp)
  • Gasoline -6.56mm (-1.99mm exp)
  • Distillates -925k (-1mm exp)

This is the 9th weekly rise in crude inventories (some chatter on API data including SPR barrels but that was marginal at best compared to the headline print)...The gasoline draw is the biggest since April 2011

 

Notably West Coast (PADD 5) CRUDE STOCKS INCREASE 4.65M BBL, MOST SINCE OCT. 1999 ..

Bloomberg's Bert Glibert notes that based on bill of lading data, the biggest sources of waterborne barrels to PADD 5 last week were Ecuadorian Napo and Kuwait Crude oil.

This is a new record high for US crude inventories...“Inventory drawdown slower than I thought after cuts,” Saudi Arabia's Khalid Al-Falih admits.

 

Putting the 2017 surge in context, commercial crude stocks are now up 49 million barrels YTD, compared to 38 million in 2016 and a 22MM average over the past decade according to Reuters.

In the last week, oil imports accelerated to 8.15MMbpd from 7.6MMbpd the week before.

However, offsetting the spike in crude imports, gasoline imports fell to the lowest level since 1999.

 

As a result, gasoline stocks declined by 6.6mmbpd to 249 mm barrels, although still well above the 10 year median for this time of the year.

Distillate stocks likewise dipped modestly in the last week, although remain at the higher end of the last 10 year range as the following Reuters chart shows:

Meanwhile, US crude production continues to trend higher with lagged rig counts, even as Saudi oil minister Khalid Al-Falih had complained that “the green shoots in the U.S. are growing too fast.” In the latest week, US Crude production rose by another +56k b/d, or +0.6% W/W to 9.088MMbpd

This means that US oil production, which is again rapidly rising on leaner, more efficient production technologies, is now just 5.5% below its lifetime high, a level it will surely overtake rapidly should the price of crude not tumble from current levels.

And as a reminder, the EIA published another bullish outlook for U.S. oil production in yesterday's Short-Term Energy Outlook. It raised the 2017 year-on-year increase in crude and condensate production to 330,000 b/d from its previous assessment of just 100,000 b/d and now sees output above 10 million barrels a day by the end of 2018. Rebalancing the market is getting more difficult.

 

Notably the RBOB bounce (on API inventory draw) had been largely erased before the DOE data (and WTI had extended losses)...but the better than API crude build and huge gasoline draw triggered panic buying...

Bloomberg's Vince Piazza warns U.S. inventories across the product value chain remain elevated, with crude oil 39% above the five- year average and distillates, jet fuel and gasoline between 5.5% and 22% higher. This, along with the 51% rebound in rig count since last year, and the robust level of more than 5,300 DUCs (drilled yet uncompleted wells) implies the near-term return of U.S. hydrocarbon volume with an environment of lower range-bound prices.

It appears traders are starting to realize...

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Lastline's picture

Robots aren't winning this time

VD's picture

EVERYTHING IS CORRUPT, BROKEN & RIGGED.

 

A GARGANTUAN PONZI ACROSS ALL "MARKETS" -- ONE GREAT BIG CRIME SCENE AGAINST THE AVERAGE PERSON.

thecondor's picture

Algos bitchez!

 

Joe Sichs Pach's picture

This farce quite literally qualifies as the "same shit, different day."

cowdiddly's picture

They can play this game of drawing down the distillates all while crude is building up to records because they can run the refineries at <80% capacity and export the gasoline and diesel to make it look like there is not a glut and screw you over at the pump.

Got to support the shale ponzi drilling companies that would bring down the banks in leveraged loans at below 40.

Until they can't................

BritBob's picture

Falklands Oil

Rockhopper Exploration has issued an update on planning for Phase 1 of the Sea Lion oil field development in the offshore North Falkland basin. Operator Premier's latest estimate of capex to first oil is US$1.5 billion, with life of field costs (capex, opex, and lease) of around US$35/bbl for Phase 1.

 Rockhopper CEO Sam Moody described this as “highly attractive” in the context of the current oil price. The estimated break-even price is US$45/bbl.
The partners have submitted an environmental impact statement and revised draft field development plan to the Falkland Islands government, and discussions are set to continue on a range of operational, fiscal, and regulatory matters.
They have also reached a settlement on an insurance claim relating to costs incurred on the Isobel Deep exploration well during the 2015/16 North Falkland basin exploration campaign. Value is US$90 million (after deductions) on a gross basis. (MercoPress 23.12.16)

What about the Argentinians?

Falklands – Territorial Waters: https://www.academia.edu/10574593/Falklands_Islands_Territorial_Waters

 

All hot air...

Dr. Engali's picture

Higher prices just in time for spring break. Funny how that works out.

Jäger's picture

We are due for a "refinery fire" 

RealistDuJour's picture

So umm yeah... about that... I wonder where the 10 million barrels that were released by the SPR at the end of February went...?  Drawdowns in end product and a massive one time influx into inputs.  Read between the lines.

PurpleNIRPle's picture

WIKILEAKS VAULT 7 IS THE PROOF DONALD TRUMP HAS THAT HE WAS WIRETAPPED:

 

https://www.youtube.com/watch?v=RVp1xT78PUY&index=16&list=PLz5bXc3GZwmzP...

Atomizer's picture

Two links, I haven't provided the last time SPR was filled up on the exchange. I have it, you find it. You idiots just produce bullshit news. I won't coach you. 

I can hear your CEO, weeee neeeed clickbait you motherfucking muppets. 

https://energy.gov/fe/spr-crude-oil-sales-and-exchanges

https://energy.gov/fe/services/petroleum-reserves/strategic-petroleum-re...

coast1's picture

light crude is down 1.34%

JimJinNJ's picture

this is ridicuous ZH oil porn.   put some insight into your headlines.  you're worse than the breatless assholes on CNBC.

_RRR_'s picture

without this I could not sleep tonite

Publicus's picture

I knew it was going up since yesterday Zerohedge ran a propoganda article saying it was going to go down this year.

venturen's picture

load up the ships....park offshore....claim drawdown....then sell same oil back into the market awash with oil! Just another wall street/hedgefund fraud