WTI/RBOB Drop After Surprise Crude Build

After clinging to the green all day, despite a strong dollar, WTI/RBOB slipped into the red after API reported a much bigger than expected (and surprise) crude build (+4.854mm vs -1.75mm exp).

 

API

  • Crude +4.845mm (-1.75mm exp)

  • Cushing +62k (+550k exp)

  • Gasoline -3.369mm

  • Distillates -768k

After drawing down last week, expectations were for crude draw this week but API reported a large surprise crude build...

Crude inventories are 2.4% below the five-year norm, while Cushing stockpiles are about 30.5% below the average.

WTI/RBOB managed gains today (RBOB highest since Oct 2014)  - despite the dollar strength - heading into API...but kneejerked notably lower on the print...

As Bloomberg reports, a large number of drilled-but-uncompleted wells in shale plays and the potential for rising output have weighed on American prices, said Walter Zimmermann, chief technical analyst at ICAP-TA.

“You are probably seeing some serious producer hedging into these lofty levels here, whereas I don’t see anybody keen to hedge against Brent given these geopolitical fears.”

Notably, the Brent-WTI spread blew out to $8 today...

 

Comments

RealistDuJour Tue, 05/15/2018 - 16:40 Permalink

Going into a long weekend to start summer... and commentary on what this means for gasoline noticeably absent. LOOK OVER THERE, A SHINY!  Not a single word on the gasoline draw.

cn13 Tue, 05/15/2018 - 16:54 Permalink

The banksters are jamming the crude oil market as high as possible for the upcoming ARAMCO IPO.

U.S. crude oil production since the beginning of 2017 has increased by over 1.7 million barrels per day.  Nearly all the 1.8 million barrel production cut by OPEC has been negated by rising U.S. production.

Fundamentals have nothing to do with it.