WTI Holds Losses Despite Surprise Crude Draw

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by Tyler Durden
Wednesday, Nov 17, 2021 - 10:37 AM

Despite dismissals over outcomes, oil prices remain under pressure from ongoing talk of SPR releases (US and/or China) from a desperate President Biden batteling record gas prices at the pump. WTI wasn't helped by Fed's Bullard's hawkish comments either and this morning's hawkish tilt to short-term interest-rates suggests his perspective may be being taken seriously by an increasingly anxious-about0inflation market.

“The actual contribution to the supply is so limited,” Hans van Cleef, senior energy economist at ABN Amro said of a possible release from reserves.

“For now we are rangebound, while waiting for new triggers.”

Last night's small crude build and large drop in stocks at Cushing reported by API will be key to watch in the official data.


  • Crude +655k (+1.2mm exp)

  • Cushing -2.792mm

  • Gasoline -491k

  • Distillates +107k


  • Crude -2.101mm (+1.2mm exp, -178k whisper)

  • Cushing +216k - first build in 6 weeks

  • Gasoline -707k

  • Distillates -824k

According to the official data, crude stocks dropped 2.1mm barrels last week (very different from API and expectations)

Source: Bloomberg

Cushing stocks are getting ever closer to their low-operational-limits (around 20mm barrels) and last week's tiny 216k barrel build does nothing to change that...

Source: Bloomberg

“Crude oil could justifiably trade to the next level higher on the storage drought at Cushing alone,” said  Bob Yawger, director of the futures division at Mizuho Securities USA.

“Forget about fuel switching, whether OPEC+ adds additional barrels, or dollar weakness: if Cushing continues to slide, it could get ugly quickly.”

US Crude production had recovered to pre-Hurricane Ida levels, but the prior week saw production drfop 100k barrels...

Source: Bloomberg

WTI hovered around $79 ahead of the official inventory print, popped a little, but the faded back...

But we are sure that Biden's cunning plan to 'fix' soaring gasoline prices will solve it. If only he could comprehend the lag between crude prices, wholesales gasoline prices, and gas prices at the pump...

But hey, they need someone to blame! Because the Environmental Protection Agency is set to release biofuel quota levels in the coming weeks. A drop in blending requirements could help lower retail prices, but this may be marginal relative to the recent crude-price surge... and would not be at all in keeping with Biden's climate crisis narrative.