WTI Extends Losses After Big Crude Build, Record Production
Oil prices have been volatile in the hours since last night’s major crude inventory build, reported by API, bouncing back on more Brexit and US-China optimism headlines and chatter of OPEC+ deal extension.
“The encouraging headlines surrounding the U.S.-China trade war and Brexit seem more optimistic,” said Pavel Molchanov, a Houston-based analyst at Raymond James & Associates Inc. “In that sense, it’s perfectly reasonable for oil prices to show a bit of a bounce.”
But if DOE confirms the huge build, we suspect those gains will evap[orate rapidly…
API
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Crude +10.5mm (+3mm exp) – biggest build since Feb 2017
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Cushing +1.6mm
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Gasoline -934k
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Distillates -2.9mm
DOE
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Crude +9.28mm (+3mm exp) – biggest build since April 2019
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Cushing +1.276mm
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Gasoline -2.562mm
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Distillates -3.823mm
This is the 5th weekly build in crude stocks – longest streak since February – and largest weekly build since April 2019. Distillates have drawn down stocks for 4 straight weeks…
Source: Bloomberg
Crude production rose again to a new record high, despite the collapse in rig counts….
Source: Bloomberg
WTI traded just above $53 ahead of the DOE data -having retraced the losses from the overnight API data. Algos initially dumped WTI on the big build but then ramped it back to unchanged..
Finally, Bloomberg Intelligence senior energy analyst Vince Piazza notes that, “lack of demand remains the key risk for the oil market, notwithstanding short-term threats from terrorism, military actions and surging tanker rates. Further curbs will be needed by OPEC+ to balance markets in 2020.”
Tyler Durden
Thu, 10/17/2019 – 11:06
via ZeroHedge News https://ift.tt/32AGcrW Tyler Durden