WTI/RBOB Tumble After Surprise Inventory Build Sends Crude Glut Back To Record High
Following last night’s API-reported unexpected draw in crude, the energy complex was on a tear heading into the DOE data… but that ended quickly with a surprise build in crude and smaller than expeccted draws in gasoline and distillates. WTI/RBOB are notably lower on the data. Another rise in production further stressed markets.
- Crude -1.8mm (-150k exp) – biggest draw since 2016
- Cushing +1.3mm
- Gasoline -2.6mm (-1.75mm exp)
- Distillates -2mm
- Crude +1.566mm (-150k exp)
- Cushing +1.413mm
- Gasoline -618k (-1.975mm exp)
- Distillates -536k
Product stocks have been falling consistently since the beginning of February, but the surprise crude build shocked markets after last night’s API print
Pushing total crude stocks to a new record high.
Crude stocks are now +35 million bbl (+7%) above 2016 and +193 million bbl (+58%) above 10-yr average, according to Reuters.
The glut increased despite a slow down in imports to 7.85 million b/d last week from 8.22 million b/d prior week
Cushing, Oklahoma, the pricing point for Nymex crude futures, saw a big build, putting stockpiles there over 69 million barrels for the first time.
Production rose once again.
WTI and RBOB prices were soaring into the print
Price increase is “partly the API and partly some supply disruptions as well,” says Hamza Khan, head of commodities strategy at ING. “You have to question how much of this rally is overdone, some of it could be short covering and the fundamentals haven’t changed that much”