For the last week of December - typically a month when inventories are drawn down dramatically to avoid year-end tax-burdens - API reports a huge 5.6 million barrel inventory draw (massively bigger than expectations of a 488k build). It would appear, after 3 mixed weeks, that energy firms waited for the very last week to dump inventories into year-end (as seasonally occurs). Of course the transit of the first post-export-ban tanker may have also helped. While WTI spiked higher it is fading a little as Cushing reported a very large build of 1.4mm barrels (the 9th week in a row).
Crude inventories dropped dramatically uin the last week of December (as is usual at this time of year)...
However, there have now been 9 weeks of builds in Cushing inventory in a row (with today's 1.4mm build) as Genscape warned earlier that storage levels are getting extremely full.
And after falling all day, Crude spiked higher on the news...but gave some back as traders remembered the seasonals....
* * *
Finally, do not forget - December ALWAYS see notably drawdowns as firms lighten up inventories on their balance sheet ahead of year-end to reduce tax burdens...
And judging from history, as Bloomberg notes, it should resume as soon as the festive season is over: Stocks have built by 3.2 million barrels on average in January since 1921.
Charts: Bloomberg