After a significant draw the previous week, API reported a large 6.22mm build overnight, now confirmed by DOE with a 6.63mm build. Cushing was expected to see a considerable draw due to the outage at TransCanada's Keystone crude pipeline outage and was almost triple expectations (-1.76mm vs -610k exp). A larger than expected draw in gasoline inventories and build in Distillates was also evident as Production data fell for the 11th week of the last 12 to the lowest since Oct 2014. Oil prices are tumbling…
Genscape:
- Cushing -1mm
API:
- Crude +6.22mm (+1mm exp.)
- Cushing -1.93mm (-800k exp.)
- Gasoline -1.58mm
- Distillates -530k
DOE:
- Crude +6.63mm (+733k exp.)
- Cushing -1.76mm (-610k exp.)
- Gasoline -4.23mm (1.42mm exp.)
- Distillates +505k (+233k)
As Bloomberg's Javier Blas notes, U.S. refineries are processing record amounts of crude oil for the time of the year — and from here until late July is all up. The strong refinery intake should reduce the crude glut, but risk exacerbating an overhang in middle distillates like diesel. U.S. crude oil stocks traditionally start to decline at the end of April, as refineries ramp-up activity ahead of the driving season. But with current stocks well above the previous 5-years range, it will take months (or even years) to work through the glut.
So inventories up but production continues to slide…
Crude is tumbling – extending API losses…
The only silver lining in the report was the .42MM drop in gasoline stocks, which however are still at record high levels for this time of the year.
Why the drop? According to DOE estimates, Americans have been driving. A lot. In fact, according to the following Reuters chart, for the period of the past week, there has never been more gasoline supplied to the US domestic market.
via http://ift.tt/1oXChRl Tyler Durden