Posted by on December 29, 2016 3:08 pm
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Categories: API B+ Barrel Business Commodity markets Crude Distillates Economy energy Matter Petroleum Physical universe Price of oil Pricing Strategic Petroleum Reserve

Oil prices were back to unchanged ahead of DOE data, after falling on last night’s surprise API inventory build. Prices jumped higher however as DOE reported a much smaller build than API (+614k vs +4.2mm), though admittedly a build (expectations were for a draw). Cushing built for the 4th week of the last 5 but gasoline and distillates saw significant draws. Production dipped very modestly.

API

  • Crude +4.2mm (-1.5mm exp) – biggest in 6 weeks
  • Cushing +528k (+500k exp) – 4th build in last 5 weeks
  • Gasoline -2.8mm (+1mm exp)
  • Distillates -1.7mm (+1mm exp)

DOE

  • Crude  +614k (-1.5mm exp)
  • Cushing  +172k (+500k exp)
  • Gasoline  -1.593mm (+1mm exp)
  • Distillates -1.881mm (+1mm exp)

Product Inventory draws continue…

Notably, as Bloomberg details, total product inventory outside the Strategic Petroleum Reserve took a big drop for the second week in a row, falling 12.9 million barrels. The total of 1.32 billion is the lowest level since March.

The demand picture is mixed…

  • U.S. Fuel Demand Rose 0.51% in Past Four Weeks
  • Gasoline Demand Rose 0.56% in Past Four Weeks
  • Jet Fuel Demand Rose 2.41% in Past Four Weeks
  • Residual Fuel Demand Fell 25.70% in Past Four Weeks
  • U.S. Gasoline Demand Rose 9,000 B/D Last Week
  • U.S. Distillate Demand Fell 582,000 B/D Last Week

Gasoline exports also hit a fresh record as they rose 354,000 barrels a day to 1.149 million. This is the third week this year that exports have surpassed 1 million barrels a day.

US Crude production continues to follow the rising rig count trend, though has now dipped very modestly for 2 weeks in a row…

The reaction in crude was biased upwards initially but quickly reversed…

As a reminder oil closed yesterday with its 8th consecutive gain… the longest streak since Jan 2010.

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