US Crude Oil Inventories Surge After Production Spikes, Exports Crash

WTI was still trading lower after API reported last night's surprise crude build, and traded lower initially after DOE reported a massive surprise crude build. Additionally, US production hit 11mm b/d for the first time ever.

As Bloomberg Intelligence's Senior Energy Analyst Vince Piazza notes, even as U.S. crude inventories drain, concerns persist over global growth amid trade tensions driven by geopolitics and an increase in OPEC quotas. Slowing demand for refined products, which is tied to higher crude prices and emerging-market struggles, has dampened optimism for U.S. refiners.

API

  • Crude +629k (-4.1mm exp)

  • Cushing -1.34mm (-700k exp)

  • Gasoline +525k

  • Distillates +1.711mm

ADOEPI

  • Crude +5.84mm (-4.2mm exp) - biggest build since April

  • Cushing -860k (-700k exp)

  • Gasoline -3.17mm

  • Distillates -371k

After last week's massive draw (and API's surprise build), this week saw a huge rebound in crude inventories

But while US crude inventories surged, Cushing continues to draw down...

Permian pipeline bottlenecks continue to pressure discounts...

But production resumed its rise (after a 3-week stall) up 100k b/d, hitting 11mm b/d for the first in history...

So supply is surging, inventories are being built... because US exports are collapsing...

China, much?

And then there is this - why did US suddenly import a massive, record amount of crude from Ecuador last week?

Two words - Julian Assange?

WTI was trading lower into the DOE data (after API's surprise build) and slid further after the surprise build...

But then - as the machines stepped in - WTI rallied!!??

 

 

 

 

 

 

Comments

Lie_Detector Arnold Wed, 07/18/2018 - 12:52 Permalink

Machines don't need oil. The stock markets need higher oil prices to continue to look as if all is well. The reality is all is NOT well. It is all an illusion. The "puppet masters" (central banks) want everyone to think they are doing a great job. You can only lie and manipulate to a point then suddenly reality sets in. The Titanic hit a huge iceberg. Everyone was told everything will be alright, don't panic. Reality hit when the ship slipped out of sight going miles into the icy depths of the Atlantic ocean. 

Don't worry, be happy.

In reply to by Arnold

Kyddyl shortonoil Wed, 07/18/2018 - 16:30 Permalink

Social Security COLA is probably being calculated so low oil prices make for smaller payout and probably another hike in Medicare price that will more than eat up the tiny COLA. Granny's going to have to give up canned dog or cat food and gum kibble instead. Dairy prices are at an all time low but there's no government cheese for her either as apparently dairy farmers and farmers in general are no longer essential to our "leaders". 

In reply to by shortonoil

arrowrod Wed, 07/18/2018 - 11:18 Permalink

There is something to be said about the Mafia.  When you surprised them, they surprised you and your family. (Excluding women and children.)

dbsbunker Wed, 07/18/2018 - 11:18 Permalink

So, anything we get from China will be more expensive thanks to Trump's trade war, but gas will be cheaper thanks to climbing inventories and Trump asking the Saudi's to pump more?

Six of one, half a dozen of the other, so who cares?

Ron_Mexico Wed, 07/18/2018 - 11:42 Permalink

If the US is a net oil exporter, as Hannity and the rest of the brain-dead right like to state or imply, then why should we be pushing Saudi Arabia to produce more?  If anything, wouldn't we be pressing them to produce less?

Kyddyl 3-fingered_chemist Wed, 07/18/2018 - 16:21 Permalink

Refineries are expanding and retooling but domestic crude is super filthy and more dangerous to refine. Often a sweeter imported crude is used to help. Domestic or even pan American production won't meet US demand. Don't forget, folks on Social Security don't get any COLA if the price of oil is low when this stuff is being calculated. Cat food costs much more so does dog food and there's no more government cheese for granny to gum. As if the Republicans care.  

In reply to by 3-fingered_chemist

adr Wed, 07/18/2018 - 12:50 Permalink

Notice how the oil price rally coincided with an 600% increase in US crude exports. The majority of which went into storage tankers owned by commodity brokers to create the appearance of a supply shortage.

If that oil was forced to stay on the books in the US, cushing would be turning tankers away and shutting the pipelines down.

Oil never should have gone above $30.

The Wall St shysters have pullee some scams before, but this $70 oil bullshit with $3 gas is near the top.