WTI Dips After Huge Gasoline Build, Surge In US Production

WTI has dropped, popped, dumped, and jumped since last night's surprisingly small crude draw and major product builds from API, but remains around the $52 level ahead of DOE data this morning.

“The Chinese are throwing everything they can" at their economy, said John Kilduff, founding partner at hedge fund Again Capital LLC.

“That’s the big key to oil markets, especially when you have OPEC and Russia starting to rein in production."

Saudi Arabia’s energy minister said he was sure inventories will start to “return to normal averages and this will increase confidence” in the market.

API

  • Crude -560k (-2.5mm exp)
  • Cushing -796k - biggest draw since Sept 2018
  • Gasoline +5.99mm
  • Distillates +3.214mm

DOE

  • Crude -2.683mm (-2.5mm exp)
  • Cushing -743k - biggest draw since Sept 2018
  • Gasoline +7.503mm
  • Distillates +2.967mm

For the 3rd week in a row, gasoline (and distillates) inventories soared. However, crude stockpiles slipped slightly more than expected and Cushing inventories dipped most since Sept 2018.

(Click on image to enlarge)

Gasoline stockpiles started the year at a record seasonal high.

Aggregate inventories have been sliding for six weeks to its lowest since November but Cushing stockpiles have been rising...

(Click on image to enlarge)

“Production cuts by OPEC+ together with lower prices will, in our view, be enough to balance the market, thus avoiding a strong rise in inventories,” said Bjarne Schieldrop, Oslo-based chief commodities analyst at SEB AB.

However, US Production soared 200k to a new record high in the last week...

(Click on image to enlarge)

Shrugging off the Crude draw, WTI dipped after the huge product builds and production surge...

(Click on image to enlarge)

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Gary Anderson 3 months ago Contributor's comment

A global slowdown will just be hastened by a rise in #gasoline prices. So oil producers look weakened no matter what the price.