WTI/RBOB Slide After Surprise Crude Build

Tyler Durden's picture

WTI/RBOB had bounced back modestly today (on OPEC jawboning) ahead of the API data with bulls hoping the trend of gasoline builds stalls. With the effects of Harvey beginning to fade (and exports at record highs), we are getting a cleaner picture of the state of the energy complex and it's no so pretty for the record-long-specs. Crude inventories saw a surprise 3.1mm build (expectations for a 2.4mm draw), Cushing saw the 7th straight week of restocking and while gasoline inventories dropped, distillates saw a big build.

 

API

  • Crude +3.1mm (-2.4mm exp)
  • Cushing +1.216mm - 8th weekly build in a row
  • Gasoline -1.575mm (+200k exp)
  • Distillates +2.029mm - biggest in 5 months

Cushing continues to be restocked but the crude build is the biggest surprise and while gasoline saw a draw, the distillates build offsets that excitement...

 

 

WTI/RBOB had rallied on the day into the API print...But the initial reaction was selling after th eprint

 

“A lot below $50 and producers do produce a lot less, but conversely, much over $55, there is going to be a lot of extra production. We’re range-bound, but it’s $50-$55 and not $45-$50,” Jay Hatfield, a portfolio manager at the InfraCap MLP exchange-traded fund, says. “The inventory report will be critical”

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shizzledizzle's picture

Is it really a surprise when ships come in to port?

hola dos cola's picture

All the jawboning in the past week culminates in this graphic and the comment in it.

https://d1-invdn-com.akamaized.net/content/picaa880c2d3d9f03373302cb64a5...

The intention of the jawboning, the 'private' numbers and the bought headlines is to herd retail up to that point visualized in that graphic and pick a direction. And when the fake EIA numbers go public, 'Wallstreet' -- pre-paired -- whacks the side, long or short, that suits them best.

Fake oil in a fake market; paper oil and derivates. The private or EIA numbers just allude to a connection. Hence some get surpised.

 

Or does somebody think their quote is about the price of real oil?

Can you imagine a client to a trader: Ok, I'll take the 2M barrel shipment but wait 10 mins for the price to come down?