Despite last week's unexpected crude draw (and product draws) WTI/RBOB has faded since (even with a lower dollar) as OPEC production cut questions trump inventories for now. However, prices tumbled immediately after API report a smaller than expected draw in crude (-840k) and an unexpected build in gasoline (+1.37mm) .
API
- Crude -840k (-1.4mm exp)
- Cushing -672k
- Gasoline +1.374mm (-2mm exp)
- Distillates -1.8mm
Smaller than expected draw in crude and unexpected build in gasoline...
"The market’s ripe for a significant correction," Thomas Finlon, director of Energy Analytics Group LLC in Wellington, Florida, said by telephone. "The market is very well supplied, and can use some draws."
WTI and RBOB had bounced off early day lows helped by the tumbling dollar...but the initial reaction to the API data was a kneejerk lower...
“We’ve moved up an awful lot and really the argument is, can the Saudis engineer a price rally in the face of an enormous inventory overhang,” Bill O’Grady, chief market strategist at Confluence Investment Management in St. Louis, says by phone. “We are probably going to pivot around $50. You have to treat this as a range-bound market”