WTI Jumps Back Above $47 After Crude Draw; Production At Highest Since July 2015

Tyler Durden's picture

After API's surprise crude build, DOE dashed bears' hopes with a bigger than expected crude draw (-4.727mm vs -3.5mm exp) as the entire energy complex was inventoires decline. WTI prices kneejerked back above $47 on the proint but stalled a little as once again production jumped (to its highest since July 2015).

 

API

  • Crude +1.628mm (-3.5mm exp)
  • Cushing +608k
  • Gasoline -5.448mm (-1.3mm exp)
  • Distillates -2.888mm

DOE

  • Crude -4.727mm (-3.5mm exp)
  • Cushing -23k
  • Gasoline -4.445mm (-1.3mm exp)
  • Distillates -21.37mm (+1.2mm exp)

Amid peak demand season, the large gasoline draws are unsurprising but the bid crude draw (especialy compared to API's build) was a bullish surprise...

The latest 4.7mmbbl draw dragged down commercial stocks to 491 million, approaching the top end of the historical range.

With the latest draw, YTD crude stocks are now just 1.1mm barrels above 2016 levels, although as Reuters notes, still 154MM bbl above the 10Year average:

From the start of the year, commercial stocks are up 11 mm bbls, compared to a 38mm bbl increase in 2016, 81mm in 2015 and +29mm in the last 10 years.

Meanwhile, total imports rebounded from last week's 7.6mm bbls to 8.0mm in the latest week.

Overall, much is being made of the notable decline in US stockpiles since its peak in late March, however, as the chart below shows, US Crude stockpiles remain 37% above historical average...

Of course, last week it was the resurgence in US crude production that stymied bullish exuberance at inventory draws. After rebounding last week, it looks like the Alaskan component of US oil production slowed this week as maintenance work continues in the Alaskan North Slope, but the Lower 48 saw production hit 2 year highs...

 

And demand slumped...just when seasonally it should be surging

The crude draw last night sent prices kneejerking lower but WTI has leaked higher overnight, testing $47 once again prior to the DOE data. As the data hit, machines ran stops and burst WTI through $47...

But the biggest highlight of the report, at least according to Bloomberg, is the collapse in Saudi shipments into the U.S., with last week arrivals at a 7-year low of just 524,000 barrels a day, down from 851,000 the previous week.  That's the lowest weekly U.S. imports from Saudi since June 2010.

"Riyadh has promised to cut supplies this summer to the market that traders care the most (and where the data is most visible) and it seems to be delivering. If the trend holds, it could put upward pressure on prices... Saudi oil minister Khalid Al-Falih promised big cuts and he's delivering."

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totenkopf88's picture

What a lame, predictable, managed world we live in- oil, stawks- all of it.

Honest Sam's picture

OK, what should I reliably buy or sell, or sell short or deal in derivatives with? Which triple  ETFs should I put my go to hell fund into?

If it's all so predictable, i mean.

adr's picture

Oil is up 10%, gas prices never went down on oil's last drop and are now up 10% as well. $2.45 on $47 oil. 

So what's the real story with the declining inventory? 

Oh, I see. Almost the entire decline was exported. 

Oil bullshits got a huge break when the export ban was lifted, didn't they. 

Record storage, record output, declining demand = HIGHER PRICES! 

Fuck the entire complex. 2017 will be forever known as the year absurdity went total mainstream. 2008-2016 was just the warmup. 

totenkopf88's picture

Any gas price dip to $2.15 here automatically triggers a rise to $2.40 followed by a slow bleed back to $2.15

Lewshine's picture

ADR,

Well said! Remember, oil is an economic indicator that reveals the health and balance of the market. As is precious metal an indicator of the same in currency terms. Notice, both are traded in a similar range. Oil 42 to 50 and Gold 1200 to 1300. This fabricated trading range is what keeps the lid on both asset classes, so stocks can continue to rally unhindered...Giving the illusion that there is nowhere to invest accept equities.

 

Honest Sam's picture

"Investment", is what happens when you look in the rear view mirror, and were fortunate enough to follow Buffet into the stock market in 2008-9. And held since then.

The longer the time and distance from the bottom (2008) goes, the less like "investment" the buying of assets appears.  At this point in time the gamblers are the ones who do not have the same gains to look forward to as the bottom feeders did 8 years ago. 

If retail is doing no gambling in the market, how are the brokers stocks like TD Ameritrade at all time highs?  Something is rotten out back in the wood shed.

https://www.youtube.com/watch?v=UYd9I5i1_Ps

Crypto Kevin's picture

Look at the distillates draw. That's what matters for RBOB not crude inventories.

NoWayJose's picture

Author kind of skips right over that number - while bashing oil!

M O B's picture

The author fat fingered it.

Cordeezy's picture

wait till it hits $49.8 then it will drop down again.

 

www.escapeamazon.com

 

 

mo mule's picture

Just moar bullshit, there is more oil. The US storage tanks are full and have been far so long now they are forced to move oil to offshore storage. Just a shell game trying to keep prices up by playing with numbers at cushing and API.  The America people are paying a high price for their own over supply of US Oil.  Wall Street and the Fed's PPT keeping WTI up, cos if oil drops so does the market. The Fed's are still pumping major amount of printing press key strokes money into the system. shame, shame, lying fake bs. This will not end well, someone said somewhere, when is what I want to know, when will be have honest price discovery again? Probably never.....not till we shut down the Fed and drive them out of the country. Oh and when obamaroma and Brennan are in jail. sunni muzzies they are!  The crooks rule forever? 

adr's picture

So you shift oil to places where they don't track the supply data as well and attempt to make it look like the oil is being consumed. 

There is no such thing as an oil bear. 

There are realists and the peddlers of fantasy. 

RealistDuJour's picture

Hmm, that would suggest conversely that if you want to artificially manipulate the price of oil down when in the midst of an "oil war" with some middle eastern kingdom, you shift oil to where they do "track the supply data".  That argument then infers that the possible true price of oil is somewhere halfway between the low lows and the high highs.

 

Tugg McFancy's picture

How many times does this have to be explained. The Saudis said they were going to do it 3 months ago, it would hit in July, you really want to piss and moan about being in the wrong side of it?

BritBob's picture

Falklands Oil worth a punt?

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?  They claim that they own the Continental shelf and areas of sea around the Falklands, South Georgia and South Sandwich Islands -

Argentina's Continental Shelf Claims and The UN CLCA Commission (1 page):-

https://www.academia.edu/33898951/Argentinas_Continental_Shelf_Claims_-T...

 

 

Dreedle's picture

Crude will start back down soon.

1stepcloser's picture

Not if the dollar falls faster

Rick Cerone's picture

It's a small world after all.

voting machine's picture

Won't last. Oil under $40 coming

Zepper's picture

Ha I was right! I knew the numbers today were going to show a drawdown. I was like hmmm, 46 bucks a barrel is to low... they are going to push it up for sure... and boom! The fucking criminals did it right in front of everyones eyes again!

 

Its like watching a drugged out(most oil workers) literally steal your car right in front of you and all you can do is smile and nod your head like a fucking buffoon... because the POLICE are in on it!

Sapere aude's picture

Seriously some of you posters need psychological help. Rather than bleating absolute fake news, how about researching the facts. There is no oil glut, never has been an oil glut and the only reason we are seeing Tesla, EV's, PV, turbines subsidised to the hilt or in some cases consumers FORCED to buy this crap, where it takes 8.2 years of driving an ordinary diesel to just make up for the carbon emissions in producing one Tesla 100Kw battery.

 

The figures certainly are rigged, but the opposite to what most of you are bleating, without having even attempted to ascertain the facts.

Zepper's picture

Wait, so the 500+ million barrels of oil in storage in the U.S. is wrong? It should be much higher supposedly because so much of the black shit is being shipped off shore? Imports of SA crude are nothing now. China cant build storage fast enough? China should have close to 500 million barrels if things progress as they are. Japan has 300 million. The list is long and its just black crude in storage. And its getting bigger.

 

Wow, thats some seriously orchestrated lying. So let me get this straight... every country is lying, every oil corporation is lying, OPEC is lying and even Elon Musk who needs high oil prices to incentivize people to buy his EV vehicles is in on it as well? Wow thats a lot of fucking liars... Not saying its not possible but from where I stand your full of fucking shit!

 

The world is awash in oil... Oil should be at $15 a barrel but if it falls that much most of the stock markets in the world would collapse which against Mrs. Stroke Victims agenda as she doles out cash to her TRIBE! and only her Tribe!