WTI/RBOB Drop After Huge Gasoline Build

Last week saw API and EIA disagree but WTI rallied into the API print tonight amid expectations for a 2.1mm crude draw. However, the biggest gasoline build since the first week of Jan sparked selling in both WTI/RBOB.

 

API

  • Crude -2.28mm (-2.1mm exp)

  • Cushing -1.038mm (-500k exp)

  • Gasoline +3.759mm - biggest build since the first week of January

  • Distillates -871k

After last week's EIA data showed the exact opposite of API's one wonders whether the extra noise is worthwhile (and who is correct), but the big surprise gasoline build will be the one to watch in tomorrow's data...

 

The price advantage for crude from U.S. wells “just begs for more exports” of U.S. crude, said Bob Yawger, director of futures at Mizuho Securities USA Inc. in New York.

“People are looking at the talk of an increase from OPEC and especially thinking that the barrels will tend to compete in the Atlantic market with Brent, so that’s pushing Brent down,” said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts.

WTI rallied into the print - after testing two-month lows earlier in the day - but kneejerk'd modestly lower on the data before bouncing back to unchanged...before RBOB weakness dragged them both lower...

 

 

 

 

 

 

 

Comments

stefan-coast Tue, 06/05/2018 - 16:47 Permalink

after "HUGE" gasoline build.....Did you not mean "after a SURPRISE gasoline build? :-)

surprise, surprise surprise :-)

Not sure abut anyone else, but I have cut down my driving quite a bit because of the price of gas..Wonder how this will work out if many others are doing the same?  We just cant afford the price of gas anymore...I dont have the money for it.  Gas stations wont take my crypto-coin either.  grrrr

hanekhw Tue, 06/05/2018 - 17:01 Permalink

Right. Won't work guys. The run up in prices has resulted in a decline in consumption and what we're seeing is the inventory buildup from that decline. Play with the production, play with refining, play with price manipulation. Go ahead knock yourselves out.

Harry Lightning hanekhw Tue, 06/05/2018 - 17:33 Permalink

The inventory build in gasoline is a seasonal issue. The build in crude is due to record US production. Demand has not yet dropped on a consistent basis, but will do so once the US economy starts to feel the effects of the past Fed tightening sometime later this year. 

Crude prices are getting out ahead of that slowdown, although there may still be one more big rally left in crude before the downtrend begins.

In reply to by hanekhw

Sapere aude Tue, 06/05/2018 - 17:02 Permalink

the idea it will hurt the huskies or the saudis is nut. The people it will hurt are the people who are already selling oil at a massive discount to what they are paying to produce it.

 

US Shale

Hubbs Tue, 06/05/2018 - 17:03 Permalink

So tomorrow's headline will read "unexpected oil drawdowns send WTI futures soaring."  

More than any other commodity, market, or exchange, I have learned to completely ignore these reports. Welcome to the dippy bird. "Head goes up, head goes down." A Homer Simpson saying as he raises and lowers the head of his hospital bed.

NoWayJose Tue, 06/05/2018 - 17:09 Permalink

The oil analysts need to look up from their Wall Street Journal while being driven to work by their chauffeurs.  Maybe they will pass a gas station.

 Or maybe talk to the chauffeur.  

“Gee Joe, we had a big build in gasoline today.  Shocked all of us at the office.”

”Bossman, me and the Mrs. just ain’t driving that much with gasoline price up almost a dollar a gallon.”

 

Snaffew Tue, 06/05/2018 - 17:17 Permalink

how can that be with the economy firing on all cylinders?  There should be no gas at all as the great American economic engine consumes everything in sight!  Someone is full of shit!

F em all but 6 Tue, 06/05/2018 - 19:12 Permalink

Yup. A drop of 5 bucks a barrel usually means a 15 cent drop at the pump 2 weeks later. But a buck a barrel increase will show up as a twenty cent increase at the pumps the next day. God I luv being fucked over.