WTI/RBOB Jump On Gaosline Draw As US Crude Production Tumbles Most Since August

Tyler Durden's picture

Last night's unexpected API builds kneejerked prices lower but a weaker dollar helped levitate WTI/RBOB into the DOE print. While tropical depression Cindy may have affected the data, DOE reports a small build in crude (expectations for a draw) but all eyes were on gasoline which drew 894k, well below API's build levels and expectation of no change. Production in the Lower 48 fell 55k b/d - the biggest drop since Aug 2016 (likely impacted by Cindy).

 

API

  • Crude +851k (-2.25mm exp)
  • Cushing -678k
  • Gasoline +1.351mm (unch exp)
  • Distillates +678k (+350k exp)

DOE

  • Crude +118k (-2.25mm exp)
  • Cushing -297k (-600k exp)
  • Gasoline -894k (unch exp)
  • Distillates -223k (+934k exp)

Figures will be tricky to interpret because of impact from tropical depression Cindy, and notably the Colonial Pipeline shipping demand fell to its lowest level in six years indicating the East Coast is well-supplied and the economics to ship from the Gulf Coast are unattractive.

The levels are de minimus for sure...but enough to spike WTI/RBOB withg their extreme positioning...

 

As Bloomberg's Javier Blas notes, forget about crude oil, look at gasoline. The glut in crude appears to be shifting into products as refiners run their plants at record pace. As the 10-year seasonal chart below shows, U.S. gasoline stocks remain above the highest level for this time of the year.

 

But demand for gasoline continues to slide - very unseasonally...

Tropical Depression Cindy will likely have had some impact on U.S. oil production last week, as Bloomberg's Brad Gilbert notes that shutting in about 3 percent of the most recently reported lower 48 production number on 06/21 and 06/22. That being said, the impact should still be small and against increasing production, lower 48 production this weeks looks like it could drop by about 60,000 barrels a day as a result.  

And it did - Lower 48 Production fell 55k b/d last week - the biggest drop since Aug 2016...

A tumbling dollar (on more comments from Sintra this morning) helpe rejuvenate WTI/RBOB prices overnight and while the initial algo reactrion was to kneejerk lower, prices are rising back to pre-API levels...

“We think the oil price will continue to range trade from $40/bbl to $55/bbl for the foreseeable future,” says James Butterfill, head of investments and research at ETF Securities. “It doesn’t surprise me that the oil price is starting to stabilize now as it’s close to our lower end of $40 a barrel”

 

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LawsofPhysics's picture

True price discovery is essential to a functioning "market".

Ask yourself, what is the value of consumable calories and reduced hydrocarbons?

For my business, this is the single largest expense after salaries.

For my personal budget it is still about 7% (damn, it may actually be time to sell some aircraft...  < sigh >)

peopledontwanttruth's picture

Not making fun of anyone's comments but this is actually just to see how many here are jumping on this. Just 20 hours ago this was the article posted on ZH. These articles have become a joke on some subjects.

Here post on ZH June 27,@4:36

WTI/RBOB Tumble After Unexpected Inventory Builds

Make your/our minds up. LOL

shizzledizzle's picture

Well, holiday weekend is coming up. Need a reason to jack the prices up .25 - 35 cents a gallon while people are traveling. The it's back to the weekly "surprise" surplus.

Juggernaut x2's picture

Best bet is to fill on Wed evening before the Thurs afternoon .30 levitation-  gotta fuck those people that can only fill on Fri after cashing their paycheck

Iconoclast421's picture

BTFATH is back to BTFD today, and its back in force! SNB finally noticed that a bit of a selloff was happening.

2_legs_bahhhhhd's picture

Blah blah blah fuckin blah, the sheep will believe anything, the headline should read, speculators on fraud street profit daily on fabricated bullshit.

Edit....haha a doucebag oil trader in the house.... fuck you cocksucker, soon your kind will be hunted down like the piece of human shit you are.

trouba z ceska's picture

Oil price recovery? More oil for market rally fire!

LawsofPhysics's picture

Talking about "prices" in the absence of a mechanism for true price discovery is a fools errand...

...hell, at this rate soon oil will be "free", just like healthcare...

/s

 

decentralisedscrutinizer's picture

 

Why waste time on this alligator when the swamp’s most critical economic and political problems revolve around the hegemony of a global corporate cartel, which is headquartered in the US because this is where their dominant military force resides. The US Constitution is therefore the “kingpin” of an all-inclusive global financial empire. These fictitious entities now own the USA and command its military infrastructure by virtue of the Federal Reserve Corporation, regulatory capture, MSM propaganda, and congressional lobbying.

 

The Founders had to fight a bloody Revolutionary War to win our right to incorporate as a nation – the USA. But then, for whatever reason, our Founders granted the greediest businessmen among them unrestricted corporate charters with enough potential capital & power to compete with the individual states, smaller sovereign nations, and eventually to buy out the USA itself. The only way The People can regain our sovereignty as a constitutional republic now is to severely curtail the privileges of any corporation doing business here. To remain sovereign we have to stop granting corporate charters to just any “suit” that comes along without fulfilling a defined social value in return. The "Divine Right Of Kings” should not apply to fictitious entities just because they are “Too Big To Fail”. We can't afford to privatize our Treasury to transnational banks anymore. Government must be held responsible only to the electorate, not fictitious entities; and banks must be held responsible to the government if we are ever to restore sanity, much less prosperity, to the world.

 

It was a loophole in our Constitution that allowed corporate charters to be so easily obtained that a swamp of corruption inevitably flooded our entire economic system. It is a swamp that can't be drained at this point because the Constitution doesn’t provide a drain. This 28th amendment is intended to install that drain so Congress can pull the plug ASAP. As a matter of political practicality we must rely on the Article 5 option to do this, for which the electorate will need overwhelming consensus beforehand. Seriously; an Article 5 Constitutional Convention is rapidly becoming our only sensible option.

 

This is what I think it will take to save the world; and nobody gets hurt:

 

28th Amendment:

 

Corporations are not persons in any sense of the word and shall be granted only those rights and privileges that Congress deems necessary for the well-being of the People. Congress shall provide legislation defining the terms and conditions of corporate charters according to their purpose; which shall include, but are not limited to:

 

1, prohibitions against any corporation; a, owning another corporation; b, becoming economically indispensable or monopolistic; or c, otherwise distorting the general economy;

 

2, prohibitions against any form of interference in the affairs of; a, government, b, education, c, news media; or d, healthcare, and

 

3, provisions for; a, the auditing of standardized, current, and transparent account books; b, the establishment of state and municipal banking; and c, civil and criminal penalties to be suffered by corporate executives for violation of the terms of a corporate charter.

    

peopledontwanttruth's picture

So you have 3 other accounts plus yourself to up vote yourself.

And now back to our regularly scheduled programming

Fitch Viscous's picture

the data on oil is not always accurate as we find out time after time.  plus the forces that be that move oil are not the ones usually associated.  I am surprised not to see more Shepwave traders on here today they have really been calling the  move in oil and stocks.  ZH needs to cover their calls more. Then there would be some money to be made in trading for readers. 

StevieTexie's picture

A lot of the SW traders were on here yesterday.  They have been braggin on their profits. 

mily's picture

You cant get more cheesy than that...

EmeraldWI's picture

"I have good news and bad news. The bad news is that the Martians have landed. The good news is... they pee gasoline."

Johnny Carson

 

GlassHouse101's picture

The saudi's are crapping their togas!