WTI/RBOB Tumble After Surprise Gasoline Build, Crude Production Hits 20-Month Highs

Tyler Durden's picture

Following API's surprise gasoline build (and small crude draw), DOE confirmed concerns with a surprise build in gasoline inventories. Crude inventories drew down for the 2nd week in a row. WTI prices slipped though as production rose to its highest since Aug 2015.

API

  • Crude -840k (-1.4mm exp)
  • Cushing -672k
  • Gasoline +1.374mm (-2mm exp)
  • Distillates -1.8mm

DOE

  • Crude -1.034mm (-1.4mm exp)
  • Cushing -778k (+175k exp)
  • Gasoline +1.542mm (-2mm exp)
  • Distillates -1.955mm (-1mm exp)

Crude inventories dropped for the second week in a row but gasoline saw the first build in 9 weeks...

 

Crude Production continues to trend higher with lagged rig counts. Production is now at its highest since Aug 2015.

At this rate of growth, the U.S. could set a new weekly production record shortly after OPEC next meets to discuss its output deal.

WTI/RBOB bounced back (in the face of a rising dollar) after tumbling on API last night but ahead of the DOE data began to roll over. Algos went wild on the DOE print but the trend is notably lower in WTI and RBOB...

As Bloomberg's Javier Blas notes, the bulls really, really, really need stronger gasoline demand growth pronto. If not, the U.S. will enter the key driving season with too much gasoline on storage. Over the last four weeks, motor gasoline product supplied averaged over 9.3 million barrels per day, down by 0.7% from the same period last year. Refineries are running very hard to clear the crude glut, and the risk is creating another glut down the chain.

As Bloomberg reports, OPEC Secretary General Mohammad Barkindo sees producers near to re-balancing the market, while the United Arab Emirates Energy Minister Suhail Al Mazrouei says "it’s going to take a long time to reduce inventories." Draining the stockpile is going to take a significant period with supply running below demand. We don't quite seem to be in that position yet.

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izzee's picture

Does anybody Proof these numbers BEFORE YOU POST THEM????

ebworthen's picture

Any slack in demand will be blamed on retiring Baby Boomers taking walks and driving golf carts instead of the suck ass ponziconomy.

Much like blaming the historically low labor participation rate on retirment - instead of EBT, WIC, Obummercare, and the abject lack of career employment.

KnuckleDragger-X's picture

Blame it on electric cars, or maybe the underwear gnomes have change their business practices to oil....

BingoBoggins's picture

underwear gnomes?!? you got 'em, too?!

BingoBoggins's picture

Through Air-Conditioned Malls, dammit! There's trade-offs ...

FreeShitter's picture

Well gas is up 50 cents , gotta love rex.

izzee's picture

The target is/was Gas-at-the-Pump $3.10 - $3.50 by Memorial Day. But with the wholesale builds maybe not. Gotta hide some of it in the next few weeks to get the price back up. RBOB was up to $1.76 last week. My local Pump price went up 22 cents in 2 weeks.

Peacefulwarrior's picture

A surprise is an unexpected occurrence like waking up and your nanny is bed with you. How is this a surprise?

Turin Turambar's picture

I d not think that word (surprise) means what he thinks it means.

bshirley1968's picture

US uses 15 million barrels a day.  We produce 8 million barrels a day.  Simple math says we have to import 7 million barrels a day to break even.

When someone can explain how we could EVER be energy independent at current levels OR how in the hell we decided it was a good idea to lift a 40 year ban so we could EXPORT oil again, then any "numbers" regarding pricing and inventory might have meaning.  Until then, it's complete bullshit and price manipulation just like everything else in this bullshit world "economy".

A. Boaty's picture

C'mon, people, the bulls need some help here. Get out and drive!

1033eruth's picture

Doesn't matter how much production surplus or stored oil we have; summer is coming.  They'll get the price manipulated up in time for summer, prime tourist season.