Following last week's huge 5.9mm draw (as entirely expected this time of year given window-dressing) expectations were for a 2.5mm barrel draw this week from DOE. However, API reported a major surprise 2.9mm barrel build, bring December's total to just 1.7mm drawdown (against a 5.5mm average draw in December). This is massively worse than expected given the seasonals (along with a 923k build at Cushing) and while WTI has oscillated up and down around $38 since the API/DOE build 2 weeks ago, it is fading on this data.
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Sending WTI prices lower off $38 resistance...
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Do not forget - December ALWAYS see notably drawdowns [4] as firms lighten up inventories on their balance sheet ahead of year-end to reduce tax burdens...
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And judging from history, as Bloomberg notes [4], it should resume as soon as the festive season is over: Stocks have built by 3.2 million barrels on average in January since 1921.
Charts: Bloomberg
