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.