WTI/RBOB Jump After Big Crude Inventory Draw, Exports Hit Record High

Tyler Durden's picture

WTI/RBOB prices recovered from their drop after API reported a big surprise gasoline build overnight ahead of the DOE data which showed a major crude draw (and smaller than API-reported build in gasoline). Along with no change in production, this sparked buying in both WTI/RBOB as the kneejerk reaction.

 

API

  • Crude -4.079mm (-500k exp)
  • Cushing +2.048mm (+1.8mm exp) - biggest build since March
  • Gasoline +4.19mm (+1mm exp) - biggest build since Jan
  • Distillates -584k

DOE

  • Crude -6.023mm (-500k exp) - biggest draw since August
  • Cushing +1.525mm (+1.8mm exp) - biggest build since March
  • Gasoline +1.644mm (+1mm exp) - biggest build since August
  • Distillates -2.606mm

Major draw in crude (considerably larger than API and expectations) is dominating the headlines but the continued restocking in Cushing and another big build in gasoline is likely weighing on prices

However, as a reminder, Crude-oil inventories remain bloated at more than 24% above the five-year average, with production and exports recovering. Refined-product markets are tighter heading into winter.

Notably, implied demand slumped in the last week...

Last week saw the rig count rise but US crude production was unchanged for the Lower 48, having rebounded from the effects of Harvey

Total U.S. exports of crude oil and refined petroleum products surged last week above 7 million barrels a day, a hefty 1 million barrels a day higher than the previous week -- and, of course, an all-time high.

Both WTI and RBOB prices recovered their losses from API data overnight (but were sliding into the DOE print) with Saxo Bank's Head of Commodity Strategy, Ole Hansen, noting that "the market is basically fretting another bearish report." But today's DOE reports offered enough to get the algos into buying mode, spiking prices initially...

Julian Lee, Bloomberg Oil Strategist, notes one thing to consider... The U.S. has wiped out 9 months of OPEC output cuts in just two weeks.

The 11 members of OPEC bound by the output deal cut their production in September by 1.041 million barrels a day from their combined reference production level.

 

The U.S. in the last two weeks - after recovering from the impact of Hurricane Harvey - boosted its crude oil exports by 1.056 million barrels a day.
 

 

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RealistDuJour's picture

But but but, muh gasolines!

Canadian Dirtlump's picture

The company I'm with in Alberta has been lucky to have been providing services to one of the lowest cost producers around for the last few years. I told my CEO last year that we needed to keep our nose clean with these guys, keep it safe, keep the quality where it needs to be, and provide value - all while making decent money ( we've cut to the bone - and have were on death's door last year ) and watching the other bodies hit the floor. We'll either come out on the other side and rock & roll, or the world will be in darkness and it will all have been a joke anyways.

 

Him and another executive like to talk about where the price of oil is going and I always say it's a retarded ping pong match between "unexpected draws of ___" and " unexpected builds of ____."

 

For my own greedy reasons I hope it stays in the sweet spot until the gulf coast ( of the middle east, not the US ) burns. For now we can deal with the 24 hour news cycle and an endless litany of data dumps to drive algos and keep the ponzi casino going.

happyfrog's picture

Gartman killed the rally last week when he said it was heading to $55.  Next stop will probably be $42... and of course then he'll turn bearish at the bottom.

Les Grossman's picture

Zerohedge's headlines on oil almost always create an opposite move shortly after they print it....e.g  Today:  oil actually got slammed down,  and only spiked hours AHEAD of the EIA report....then started selling off 1 hour AFTER the report   btw, that price action in CL futures is normal whenever the weekly report is released.

buzzsaw99's picture

 

<--  BOOYAH!!

<--  VEE HAVE GAZOLENE ALL OVER ZEE PLACE

adr's picture

If we still had a ban on exports we would have run out of storage in the US a long time ago. Maybe that's why the export ban was lifted. Hard to double the price of oil when you can't store any more of it.

Is anyone actually using all the exported stuff, or are the barrels just being dumped in deep sea trenches like the $300+ billion of product exported but never imported anywhere else?

Essentially the market manipulators have just figured out is they put a few million barrels on a tanker and ship it somewhere else they can cause oil prices to spike 5-10% making them billions on the contract churn.

They don't give a shit if they destroy the functional economy, they don't exist in it.

RealistDuJour's picture

My EIA facts...

  • In 2016, the United States consumed a total of 7.21 billion barrels of petroleum products, an average of about 19.69 million barrels per day (should be 19.98 bpd by the end of 2017)
  • US currently produces 9.561 mbpd
  • US currently imports 7.4 mpd

Something tells me, let's call it math, says that there is a slight deficit before even exporting.

Where's your "facts"?

Muh facts > Your "feelings"

 

bankbob's picture

Remember that the USA has always imported Crude and exported refined product. 

Today the US imports the great majority of crude from Canada and Mexico.  And,

the only refineries in the World that can handle thick sludgy Alberta Crude are in Texas.

The ONLY state that imports Middle Eastern Crude is California.

 

More importantly - the export of Natural Gas is growing by leaps and bounds.  6 new pipelines

are going into Mexico where dirty coal and nasty fuel oil will be replaced with clean NatGas.  And,

Mexico's problamatic brownouts will become a thing of the past.

kavabanga's picture

Time to buy it in med/sublong terms.
 After hit target at our previous analysis USOIL  hit support again. 

We have a good setup here to follow bullish with target at 53.91 

If channel up break down, support at 48.52.

But I guess will rise a bit. 50.45 already.

Turin Turambar's picture

The numbers are as manipulated as BLS bs.

post turtle saver's picture

"Total U.S. exports of crude oil and refined petroleum products surged last week above 7 million barrels a day, a hefty 1 million barrels a day higher than the previous week -- and, of course, an all-time high."

they're not even getting started yet, wait until things really start to rock n' roll...

"Julian Lee, Bloomberg Oil Strategist, notes one thing to consider... The U.S. has wiped out 9 months of OPEC output cuts in just two weeks."

I done told all y'all...

- by end of 2018, the US will out-produce Saudi Arabia and become the #2 oil producer in the world

- in the course of doing so, the US will break its bpd record set in 1970... Hubbert was *wrong*

- the Saudi Aramco IPO will be a bust when everyone figures out that US shale has taken the price lever away from OPEC

- those of you who say it can't last forget that the US is currently sitting on 1.1 trillion bbl in *recoverable reserves*... not known, *recoverable*

- the Saudis know this, which is why they're hedging by backing US shale activity (see, when you have a lot of money you make money either way)

- the US is the #1 refiner in the world and has the absolute best refining tech you can have, bar none... the crew in southeast Texas can turn Crisco into kerosene if they have to and they can do it at a profit

everything all y'all think you know about the oil market is being flipped on its head... quit watching daily action, it's meaningless, strategically the writing is on the wall for OPEC