Oil Dumps'n'Pumps After Unexpected Crude Inventory Build Offset By Production Cut

A susprisingly large draw at Cushing (according to API) overnight sparked buying in crude ahead of today's DOE data (despite USD strength). Despite API's 1.34mm draw, DOE reported a 1.4mm build in Crude inventories (with a 2mm draw expected). Crude plunged on the data despite a big draw in gasoline (but build in Distillates). But, after 3 weeks of production rises, US crude output slowed this week... sending crude higher once again...

API

Crude -1.34mm (-2mm exp)
Cushing -1.3mm (+1mm exp)...Genscape reported a small (<100k) draw for Cushing.
Gasoline -450k (-1mm exp)
Distillates+593k

DOE

Crude+1.41mm(-2mm exp)
Cushing -1.12mm (+1mm exp)
Gasoline -3.2mm (-1mm exp)
Distillates +1.15mm

Crude surprised with a 2nd build in a row:

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Production dropped for the first time in 4 weeks as crude imports rose to the highest since Oct 2012:

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Some good news emerged for the soaring gasoline glut, which saw a 3.3MM drop in inventories.

Even so, stocks are still 21.5 million higher, or 11.8%, from this time a year ago. Of this number East Coast, PADD1, gasoline stocks fell 1.2 million bbl but were still 11.5mm bbl higher than 2015.

Oddly, the drop in gasoline stocks happened even as refinery usage rose, with throughput rising 266,000 b/d from the past week, if still 223,000 lower than a year ago.

Having rallied back over $40 this morning post-API, despite USD strength, WTI plunged on the crude build...before the algos ripped it higher on the production cut (and perhaps gasoline draw)

(Click on image to enlarge)