Just as oil was set to test session lows after another massive oil build, sending US crude inventories to all time highs, many were wondering if the same exact algos that struck for the past weeks, would reappear sending oil surging on negative data would hit again. The answer: a resounding yes.
While it is difficult to explain why oil prices are rising, the rally it's coming on very strong volume as someone clearly thinks it's time to buy crude, again, and doing so with gusto.
So, bang on at the 3:45 pm London time, the algo emerged, exactly as in the last four weeks when bearish EIA figures also triggered buying.
Just like it did last week...
And the week before...
And the week before that...
* * *
After API's bigger than expected crude build, DOE confirmed the data with a much-bigger-than-expected 9.5mm build pushing total US crude inventories to a new record high. Along with a large gasoline build, WTI/RBIB prices are tumbling on the print.
- Crude +9.94mm (+3.5mm exp)
- Cushing -1.27mm (+500k exp)
- Distillates +1.5mm
- Crude +9.527mm (+3.5mm exp)
- Cushing -702k (+400k exp)
- Gasoline +2.846mm (+500k exp)
- Distillates -689k (-1mm exp)
DOE confirmed API's major build - the 6th weekly build in a row. Gasoline inventories surged again.
Sending US crude inventories to a new record high...
And Gasoline inventories to record highs...
Crude stocks have risen +38.5 million bbl in first 41 days of the year compared with 10-yr avg rise of just +14.3 million bbl
As Bloomberg's Javier Blas notes, this time the bulls can not claim that unusually high imports are driving up crude stocks. U.S. refiners last week bought overseas 8.5 million barrels a day, down 881,000 barrels a day from the torrid pace of two weeks ago. On a four-week average, imports are running just 9.9% above last year's same period.
Furthermore, the U.S. exported last week crude oil at a rate of more than 1 million barrels a day -- a record. That's way more than the production of several OPEC members, including Libya, Ecuador, Gabon and Qatar.\
US crude production continues to rise in trend along with lagged rig counts...
Bear in mind that the last 3 weeks have seen a fundamentally correct reaction lower in WTI/RBOB prices only to be algo panic bid after...
For now crude is bouncing as RBOB crashes....