WTI Drops After Surprise Crude Build - Tuesday, July 17

Oil prices rebounded to unchanged intraday on hopes that tonight's API data would show a notable draw and recover the momentum in energy markets. However, WTI dropped as API reported a surprised crude build of 629k (exp was a 4.1mm draw).

“We’re expecting a fairly bullish report tonight, a significant decline in U.S. crude oil inventories again,” said John Kilduff, a partner at New York-based hedge fund Again Capital LLC. At the same time, we’re seeing “short-covering and profit-taking at the moment from the big sell-off.”

API

• Crude +629k (-4.1mm exp)
• Cushing -1.34mm (-700k exp)
• Gasoline +525k
• Distillates +1.711mm

Following last week's massive crude draw (and distillates build), API reported a surprising 629k barrel build (massively missing the 4.1mm draw expected), and Gasoline and Distillates also saw builds...

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WTI traded flat around $68 heading into the API print then tumbled on the surprise crude build... 

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“There is a potential to be in an oversupplied market where Saudi is going to pump as much as they can,” said Tariq Zahir, a commodity fund manager at Tyche Capital Advisors LLC. “It’s going to take a supply outage for prices to go significantly higher”.