WTI Extends Losses After Crude, Gasoline Builds

Oil prices roller-coastered overnight after a bigger than expected crude build (from API) sent prices lower before yet more trade-deal optimism sent prices higher this morning, before sliding back to pre-API levels ahead of the official data.

“Despite national growth in gasoline inventories, which are quite common in the autumn as refiners emerge from maintenance, concerns are growing for the extended impact of the loss of the PES refinery in Philadelphia,” Tom Finlon, director of Energy Analytics Group Ltd in Wellington, Florida, said in a note.

 

API

• Crude +3.639mm

• Cushing -516k

• Gasoline +4.378mm

• Distillates -665k

DOE

• Crude +1.57mm (-878k exp)

• Cushing -97k

• Gasoline +5.132mm (+800k exp) – biggest build since Jan 2019

• Distillates +725k

After API reported big surprise builds in crude and gasoline, official data showed a smaller crude build of 1.57mm barrels and a huge gasoline build of 5.13mm barrels (also Distillates built for for the first time in 10 weeks)…

Source: Bloomberg

Overall crude inventories are at their highest since July.

US crude production continues top rise to new record highs ignoring the ongoing collapse in the US oil rig count…..

Source: Bloomberg

Notably, Bloomberg points out that output is up around 760,000 bpd this year. That’s a stark difference from the gain of more than 2 million bpd from December 2017 to December 2018.

WTI hovered around $58.30, pre-API levels, ahead of the DOE data.

Finally, Bloomberg Intelligence’s Senior Energy Analyst Vince Piazza explains that “actions will speak louder than words at next week’s OPEC+ meeting, with tighter compliance to output curbs and an extension of the cuts beyond their March expiration needed to inspire the market. A trade truce between China and the U.S. is less of a factor, as negotiations are likely to be drawn out.”