WTI Drops After 3rd Weekly Build In Gasoline Inventories

Amid Libya headlines and contract rollover, WTI prices were wild heading into the inventory data tonight. Following two weeks of surprising builds in Gasoline inventories, API reports a surprise 3rd weekly build in gasoline inventories, and crude drawing only modestly (in line with expectations). The initial reaction was a kneejerk lower, breaking down the day's wedge.

 

API

  • Crude -3.595mm (-3.5mm exp)
  • Cushing -462k (+300k exp)
  • Gasoline +1.402mm (-1mm exp)
  • Distillates +2.048mm

Last week confirmed the concerns about building gasoline (even though crude saw a draw) and API shows a 3rd week of builds (and crude's draw was just in line) and Distillates also saw the biggest build since July

Price action was chaotic today heading into the API data and immediately kneejerked lower (breaking down from the wedge)...

“If we are going to get into a new era of instability with Libyan oil production, if it becomes a wild card again, that’s definitely supportive for prices,” Phil Flynn, senior market analyst at Price Futures Group, told Bloomberg, adding, with reference to today's price action, there’s “a little bit of expiration madness. There’s a lot of positioning before the September expiration."

Comments

zebra77a bamawatson Tue, 08/22/2017 - 18:34 Permalink

There be smoke - there be fire.UAE ordered 2 million barrels of Condensate FROM NEW YORK. No explaination other than a trade sanction with Qatar.. But why not order it from Saudi Arabia next door than have to ship it back half way around the world? Saudi Arabia reports in Nov 2016 at their current rate they will go bankrupt.We just need an announcement from Gartmen to short Oil, and we *KNOW* this is going to $150 / barrel asap.Something is going on...

In reply to by bamawatson

GooseShtepping Moron Tue, 08/22/2017 - 17:22 Permalink

"A surprising build in gasoline inventories" is a euphemism for demand destruction due to a stagnant global economy. It's not as if oil refineries were going hell bent for leather and suddenly said "Oops! Looks like we made too much gasoline!"

adr Tue, 08/22/2017 - 17:47 Permalink

When oil is $47 and gasoline is priced like it's $100, you're going to get the demand destruction of $100 oil. Not that hard to figure out. Diesel is $2.18 at my local station but 87 is $2.64. That's fucking retarded. 

Sapere aude Wed, 08/23/2017 - 02:54 Permalink

Five Star. You should get out more and research.The U.S. production 'surge' is complete and utter rubbish.Its not just me writing that, its physics supporting it.Look at the rigs, the number of wells on the shale, then look at the legacy rates....that makes it impossible that U.S. production is rising, hence the imports are.Why is it that U.S. citizens are prepared to believe most anything they are told without researching it, and then look back at history to see what previous fake news they were given.Now let us just look at one of yesterday's comments:"A couple of notable things have occurred in the past month or so. Pioneer Natural Resources, a top Permian producer, raised concerns when it told investors that its Permian shale wells were coming up with a higher natural gas-to-oil ratio than expected, a potentially worrying sign. The company also reported that it had trouble with some of its wells, forcing it to delay some completions."

Sapere aude Wed, 08/23/2017 - 02:50 Permalink

Dunce. Are you joking! Our oil companies are not doing alright. NOT ONE shows a profit on shale. ANy that are making profit are doing so from ME oil or oil outside of the US. Shale is causing them to selll assets, cut dividends, cut jobs, and push hundreds of companies into bankrupty. 16/5/17 Oil Patch Transportation, Inc. $2,432,80117/5/17 Gulfmark Offshore, Inc. $560,197,09417/5/17 Tidewater Inc. $2,340,910,00019/5/17 Archer Limited $601,750,0001/6/17 Halker Consulting LLC $3,639,8292/6/17 Rooster Energy LLC $51,872,9318/6/17 Deep Operating LLC $1,454,85313/6/17 Duron Systems Inc. $5,880,78513/6/17 Petroleum Speciality Rental, LLC $1,695,31814/6/17 CGC Holdings (US) LLC $3,445,118,25518/6/17 Quality Oil Tools LLC $10,891,21921/6/17 Omega Alpha Resources LLC $167,94528/6/17 KMK Oil & Gas, inc $10,32529/6/17 King's Peak Energy, LLC $23,455,9927/7/17 Waller Marine, Inc. $2,887,99714/17/17 Pellerin Energy Rentals, LLC $118,09117/7/17 Double Eagle Energy Services LLC $1,185,39217/7/17 West Texas Bulldog Oilfield Services LLC $5,500,08520/7/17 Prospector Offshore Drilling S.A.R.L. $166,051,933

Sapere aude Wed, 08/23/2017 - 02:53 Permalink

zebra77...perhaps you should research whether in fact they did import the condensate in the first place? Of course it came from Saudi, but attributed to US just to massage U.S. oil figures. Even drawing down from the SPR has helped massage U.S. oil figures, hence the need for some to mention sell off of SPR oil just to bring it back to the levels its actually at, rather than explain a black hole of crude in storage.