WTI/RBOB Tumble After Biggest Increase In Total Inventories Since April 2015

Tyler Durden's picture

WTI/RBOB extended their losses after API's surprise gasoline build headlines overnight, and DOE data was even worse with surprise builds in crude, gasoline, and the biggest distillates build in 5 months. Production in the Lower 48 fell for the first time in 17 weeks (but very marginally). The reaction in oil and gasoline prices was abrupt...

So far this week... Genscape reported a 750k draw at Cushing last week...

API reported

  • Crude -4.62mm (-3.25 exp) - 9th weekly draw in a row
  • Cushing -1.56mm (-593k exp) - biggest draw since Oct '16
  • Gasoline +4.08mm (-50k exp) - biggest build since Jan '17
  • Distillates +1.75mm

DOE reported

  • Crude +3.925mm (-3.25 exp) - biggest build in 3 months
  • Cushing -1.444mm (-450k exp) - biggest draw in 4 months
  • Gasoline +3.324mm (-50k exp) - biggest build in 2 months
  • Distillates +4.355mm (+650k exp) - biggest build in 5 months

After last week's biggest crude draw since 2016, expectations continued to point to more draws but API's overnight build in gasoline surprised many. High refining processing rates have eaten into the crude glut, but they risk moving it downstream into products, and DOE confirms that is now backing up the chain once again... with major builds in crude, gasoline, and distillates...

As Bloomberg notes, the U.S. refining industry is working extra hard this year, processing last week hit a record high of 17.51 million barrels a day, more than one million barrels a day above last year's level at this time. After hitting the highest level since 1995 in January, the U.S. has cut gasoline stockpiles 21 percent to 24.7 days.

However, 4-week average gasoline demand fell 23,000 barrels a day - not a big drop, but going in the wrong direction for the start of the summer driving season. More importantly, perhaps, the weekly number was down 505,000 barrels a day.

That crude stockbuild goes against all expectations. If you add in refined products and the SPR, total U.S. inventories were up by a massive 13.815 million barrels week on week. That's the biggest increase in total inventories since April 2015. Still absolutely no sign of rebalancing in the U.S.

Crude Production in the Lower 48 fell for the first time in 17 weeks after reaching its highest since August 2015. The last week saw production drop from 8.835m b/d to  8.815m b/d.

 

Ahead of the DOE report, reports hit that Libya's largest oilfield was said to be shutdown due to a workers' protest (there was no reaction), but the overnight tumble on the surprise gasoline build was evident. Then when the shocking DOE data hit, prices tumbled...

 

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Seasmoke's picture

Strange these sudden drops never hit the Dow or S&P.

Dukes's picture

Surprise? Fukn shocked!

Naaah

101 years and counting's picture

ru-roh.  oil nearing 45 handle.  time for some opec BS headline to spur the algos to bid it up....

tmosley's picture

"War in Qatar" apparently not enough.

The central planners's picture

Thats why they are provoking Iran.

newmacroman's picture

Nothing a little Cutter cut can't fix

Monico Sailer's picture

Okay in all seriousness, this is too strange. The analytics at Shepwave have been absolutely nailing these market moves. This move in oil today just confirms my suspicions that they are still in bed with the larger forces to manipulate. lol  

FreeShitter's picture

Hedge funds need a little squeezing...

Billy G's picture

DON'T QUESTION IT!  Definitely they have been basically dead on.  I just roll with it.  I was reading their prognosis for the next week and I think we see the move in equities by Friday. Their calls in oil and gold too have been scary 

syzygysus's picture

Saudi Arabia should be attacking Qatar in 3...2...1

Billy G's picture

something is going to happen over there soon to change everything is what I think. 

KimAsa's picture

. . . Prices tumbled.

trouba z ceska's picture

Funny how stock market completely ignored oil price plunge

adr's picture

It makes no sense that gasoline stockpiles would be cut 21% in just over 24 days during a period of record refinery runs and zero increase in demand.

Unless the cut in stockpiles isn't real and just an indication of record inventory being shipped around.

I'm thinking the inventory drawdown never happened.

 

There is no such thing as summer driving season anymore. You think people that don't have $200 in their pocket can take lavish vacations? And that they'd drive somewhere?

Pasadena Phil's picture

Oil prices have absolutely nothing to do with reality because reported numbers make no sense. You would think that with major ME oil producers on the brink of war, oil prices would be skyrocketing. But that would be based on reality. Can't have that! Up is down, war is peace, work will set you free....

NoWayJose's picture

This smells like fake data - algorithm driven manipulation - and a blow off bottom. They are loading up on long oil positions and - surprise - will flip the numbers next week.

After an attack on Iran - who is blaming the Saudis - and is claiming revenge? Islam is a religion of vengeance!