WTI/RBOB Slide As Crude Production Hits 20-Month High, Cushing Glut Hits Record High

Tyler Durden's picture

WTI/RBOB prices slipped ahead of DOE data as Canada's growth outlook cut trumped Saudi Arabia's wishy-washy chatter on production cuts. DOE data confirmed the biggest crude draw of 2017 (-2.16mm) and gasopline and distilates saw the 8th week in a row of drawdowns but Cushing's 276k build pushed it to a new record high as US crude production rose once again to its highest sine August 2015.

 

API

  • Crude -1.3mm (-1.5mm exp) - biggest draw since 2016
  • Cushing +358k (+800k exp)
  • Gasoline -3.7mm (-1mm exp)
  • Distillates -1.6mm (-1mm exp)

DOE

  • Crude -2.16mm (-1.5mm exp)
  • Cushing +276k (+800k exp)
  • Gasoline -2.97mm (-1mm exp)
  • Distillates -2.15mm (-1mm exp)

The biggest crude draw since 2016 and 8th weekly draw in gasoline and distillates inventories...

As Bloomberg's Javier Blas notes, the most negative for the bulls is Cushing, the crucial storage town in Oklahoma that serves as the delivery point of the Nymex WTI oil futures contract. Crude stocks there rose to a fresh all-time high, now at 69.4 million barrels (+276,000 barrels from the previous week). According to the EIA, Cushing has a maximum working capacity of 77 million barrels, so we are really approaching tank-tops.

 

Blas also notes, the other big negative for the bulls is U.S. production. The EIA is forecasting another big week-on-week jump (+36,000 barrels a day), bringing total output to 9.235 million barrels a day, the highest since January 2015. On weekly readings (which are subject to big revisions), domestic production has increased roughly 800,000 barrels a day from a low point in July. The growth isn't just coming from shale, but also from rising output in the U.S. Gulf of Mexico.

US Crude production rose for yet another week to its highest since August 2015...

 

And the reaction to the DOE data (after some volatility going in following BoC's growth outlook reduction and loonie weakness) was an initial kneejerk higher then slip lower...

 

What happens next?

 

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NugginFuts's picture

It's ok. Producers will make it all up when we start another war in the Middle East. 

Boris Alatovkrap's picture

Boris is make over $7k (ruble) per month work part time extract copper ore. Boris kept hear other people tell how much money they are make online so Boris decided to look into it. Well, it was all true and is totally change life... http://bit.ly/2ooSSPt

Government needs you to pay taxes's picture

Not worried.  Wall Street Whoring has never been more lucrative, particularly when servicing the Federal johns up from Washington DC.

interested bystander's picture

Tyler, while it is good that you print all the information about the drawdown, why not look to see how much oil was exported during the same timeframe as the DOE report.  i would suspect that there really was not a draw down, but an offload to be able to have the algos artificially support the price

Zepper's picture

I have been saying that since they changed the laws allowing for the export of oil again. 

 

These fuckers are just off loading the shit onto tankers to give the illusion that there are drawdowns.

 

GET ON IT TYLER! You're the man!

medium giraffe's picture

Awesome news if you need to refuel a fleet of very powerful submarines which are powerful, very powerful.

syzygysus's picture

I don't think they are running diesel are they?  Don't we have nuclear boomers?  I guess it depends on the class of sub.

medium giraffe's picture

God damn it.  Well, maybe if you are planning a spring roadtrip in your Abrams then.

syzygysus's picture

Gotta take all them gold bars to the lake for a canoe ride.

medium giraffe's picture

I'd join you but I lost all of mine in a windsurfing accident just yesterday.

Deathrips's picture

Windsurfing.....now you tell me.

Paddling into a 5 ft lineup with rolls of maples in hand is a bitch.

*expert tip. Using silver rolls to counterballance while surfing is expensive , yet effective!

 

RIPS

happyfrog's picture

Gartman was back on TV last night pumping oil stocks, so you know what comes next ...

blueberry100's picture

A Hoffman says it'd going to 20 -- I thought is was sad when saddly I figured I was smarter than W..

Thank goodness we have Super Brain in charge.

Pasadena Phil's picture

There's that word "glut" again. When manufacturers report record sales year after year, do their "all-time high" inventories get reported as a "glut"? So why then do the US oil inventories? We are squeezing out imports while exports accelerate. Repeat after me: "Energy independence!"

The American non-internationals (non-"Big Oil") have brought OPEC and "Big Oil" to its knees. How awful. Woe is us.

Government needs you to pay taxes's picture

Presstitutes can't say 'slut' without cringing, so they use the word 'glut' instead.

LawsofPhysics's picture

Really?  Let us know when 'merica is actually a net EXPORTER of crude.

If I were you, I wouldn't hold my breath.

Pasadena Phil's picture

I don't know how obvious this has to be for the "doom and gloom" crowd to see the elephant. Quick, who is China's biggest provider of oil imports? Times up. The US. Take a look at our nat/gas exports. Enterprise Partners alone accounts for more exports than just about every other country. The US already has effective control (if not primary influence) on global oil prices. And the "Big Oils" have relented to focusing on "lower cost, shorter time commitment" projects (shale) for the CAPEX.

Why WOULDN'T the US seize control of oil prices? It's low hanging fruit! Just do it!

adr's picture

Refined products keep gettign more expensive, even as crude oil drops. I paid more for heating oil than I did when oil was $75 a barrel.

Gasoline is now above $2.50 and premium is $2.99. I also live in a state that didn't increase gas taxes.

Refinery margins are expanding like never before. Soon realistic margins will be a distant memoery and th enew normal will be making 20%+.

Greed is off the charts and killing everyone else down the line.

LawsofPhysics's picture

Talking about "prices" in the absence of any mechanism for true price discovery is a fool's errand!!!

whatamaroon's picture

Hopefully that means more oil thru pipelines, thus more fees for the MLP's. 'Keep whatamaroon's distribution safe', is My motto.

tbone10's picture

Who gives a fuck, it will be ashes soon mofos!

whoisjg's picture

America no longer needs to import ANY oil, IF we switched more plants to LNG. 

Even with just OIL, we have ENOUGH domestic production to COMPLETELY STOP BUYING FROM THE MIDDLE EAST. 

Think about that. All these wars and involvements... are not even NEEDED!

We need a new law, no energy exports until we stop all imports. 

Until then, british petroleum will sell our alaskan oil to europe and our natural gas to China while we face wars in the middle east to replenish our oil from Saudi Ara-fuck-you-a

Government needs you to pay taxes's picture

What would the CIA do without the middle east?