WTI Tumbles Back Below $60 After Surprise Crude Build, Record Production

WTI chopped around after last night's surprise crude build from API but remains back at $60 ahead of the DOE data

As Bloomberg Intelligence's Senior Energy Analyst Vince Piazza notes, WTI crude will likely have a difficult time sustaining $60 a barrel, with macroeconomic headwinds slowing its ascent. We're more concerned about demand slowing, yet we appreciate compliance with output curbs by OPEC and its partners. Still, capacity hasn't disappeared; it's been deferred. While U.S. production growth has ebbed on calls for capital discipline, the backlog of uncompleted wells highlights the industry's potential for just-in-time inventory should crude prices seem attractive. Stockpiles are 3% above 2018 levels and about 1% below the five-year norm and Cushing inventories, almost 58% above last year.

API

  • Crude +1.93mm (-3mm exp)

  • Cushing +688k (+300k exp)

  • Gasoline -3.469mm (-3mm exp) - 6th draw in a row

  • Distillates -4.278mm (-500k exp)

DOE

  • Crude +2.88mm (-3mm exp)

  • Cushing +541k (+300k exp)

  • Gasoline -2.883mm (-3mm exp)  - 6th weekly draw in a row

  • Distillates -2.075mm (-500k exp)

After last week's huge crude draw, and despite last night's surprise API-reported build, expectations remained for a smaller draw but, like API, crude inventories rose by 2.88mm barrels...

Bloomberg notes that refinery runs took a tumble at a time when they have typically started to creep higher after seasonal maintenance, thanks to a spate of fires and other upsets. The Gulf Coast was especially hard hit, with crude demand down 294,000 barrels a day. That may have contributed to the 4.6 million-barrel increase in crude stocks in the region.

Production was flat at record highs as the lagged impact of declining rig counts is set to hit...

Unsurprisingly, Venezuelan crude imports into the U.S. remained at zero for the second week in a row. The LatAm country continues to struggle with power losses that have crippled production, as well as American sanctions on PDVSA.

WTI pushed back below $60 on the print...