With oil sliding after last night's surprise gasoline build from API (and headlines from the middle east), all eyes are on today's DOE data. As opposed to API, DOE reported a major drawdown in gasoline (-2.7mm) and along with draws in Crude and Cushing, oil prices jumped (despite a big build in distillates). Oil held gains despitye the biggest surge in US crude production since May 2015.
API
- Crude -1.007m (+950k exp)
- Cushing -680k (+100k exp)
- Gasoline +2.167m (biggest in six months)
- Distillates +2.406m
DOE
- Crude -2.508m (+950k exp)
- Cushing -724k (+500k exp)
- Gasoline -2.724m (-1.7m exp)
- Distillates +1.939m (-600k exp)
After 3 weeks of builds, crude inventories fell this week:
US Crude production rose by the most since May 2015…Lower 48 production up 100,000 BOE, Alaska up 52,000 BOE . TOTAL: +152,000 BOE
As has been the case recently, investors were looking at gasoline stocks, which declined by 2.7MM, more than the 1.638MM expected, and in linewith last week's -2.8MM draw.
The gasoline stocks breakdown by region:
- PADD1 70.125mb -0.790
- PADD2 48.618mb -2.351
- PADD3 76.595mb -0.672
- PADD4 7.105mb -0.376
- PADD5 30.215mb +1.464
Curiously, gasoline stocks now appear to be declining faster than normal, suggesting excess supply is being exported…
… as gasoline demand actually fell by -0.007mbpd to 9.762.
Gasoline imports to the critical PADD1, i.e., east coast region, slowed to 538,000bd from 794,000 last week.
Meanwhile, overall crude oil imports slowed modestly from 8.4mm b/d to 8.2mm b/d.
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The also reaction in crude makes little sense as the production surge is trumped by a drop in gasoline inventories, and as algos trip stops on the upside.
Charts: Bloomberg
via http://ift.tt/2b196Jy Tyler Durden