WTI/RBOB prices have gone nowhere since API reported a surprise crude build, but after last week’s across the board inventory draws, DOE reported surprise builds in crude and gasoline inventories and production hit a new record high, sending prices lower.
Bloomberg Intelligence’s Senior Energy Analyst Vince Piazza noted before the data hit that, propelled by WTI discounts to Brent of greater than $6 a barrel, domestic refinery throughout is expected to push higher. Strength in crude exports, relative to last year, should persist.
API
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Crude +1.099mm (-2.25mm exp)
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Cushing -930k (-150k exp)
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Gasoline -2.724mm
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Distillates -1.911mm
ADOEPI
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Crude +2.17mm (-2.25mm exp)
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Cushing +459k (-150k exp)
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Gasoline +840k
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Distillates -2.611mm
After last week’s across the board inventory draws, Crude and Gasoline saw notable surprise builds this week…
Inventories are just 3% below the five-year norm.
Crude exports hit a new record high…
Production rose 46k b/d to 10.586mm b/d – a new record high…
In the Permian basin, output is forecast to reach 3.18 million barrels a day in May, the highest since the Energy Information Administration began compiling records in 2007.
Amid all the chaos in stocks, WTI/RBOB went nowhere since the API data with no follow-through from Trump or Macron regarding Iran.
“It will be an uphill challenge for Macron to craft an agreement that is tough enough to satisfy Trump and his hawkish advisers and at the same time is acceptable to the Iranian leadership,” said Helima Croft, head of commodity strategy at RBC Capital Markets LLC in New York.
As a reminder, Bloomberg reports Iran’s oil exports would drop as much as 500,000 barrels a day this year and 700,000 barrels a day in 2019 if the U.S. revives sanctions, according toFereidun Fesharaki, chairman of energy consultant FGE. If reimposed, U.S. sanctions would require buyers of Iranian crude to cut purchases within 180 days, he said. Iran produced about 3.81 million barrels day in March, according to data compiled by Bloomberg.
But once the DOE data hit, WTI/RBOB prices slid lower…
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