WTI, RBOB Surge Despite Plunging Demand, Soaring Inventories, Rising Production

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To sum up…

 

Following big recent builds and API’s report overnight, oil held below the $53 level before DOE data confirmed the builds in crude and gasoline were even larger than API. Cushing saw a smaller than expected draw and Distillates an unexpected build. This is the 5th weekly crude build in the last six weeks and crude production also rose once again to its highest since April 2016.

 

API

  • Crude +2.93mm (+2.5mm exp)
  • Cushing -145k (-500k exp)
  • Gasoline +4.85mm
  • Distillates +1.95mm

DOE

  • Crude  +2.84mm (+2.5mm exp)
  • Cushing  -284k (-400k exp)
  • Gasoline +5.796mm (+1mm exp)
  • Distillates +76k (-1mm exp)

3rd weekly build in crude in a row (5th in last 6 weeks) and 4th major build in gasoline stocks…

As Bloomberg notes, those gasoline numbers are probably the biggest negative from this week’s report.

The stockpile has risen for 9 of the last 11 weeks and inventories are building in an already over-supplied market. Gasoline days of supply has jumped to 28.8 versus 27.1 a week ago. That inventory overhang just isn’t going away.

Crude oil inventories are 132 million barrels, or 37%, above the 5-year average level for the time of year.

Production continues to trend higher with lagged rig counts

Meanwhile, gasoline stocks rose another 6.8 million barrels to 253 million, and now stand 3.4%, or 8.2mmbbls, higher than this time last year.

Demand fell

  • Gasoline Demand Fell 3.62% in Past Four Weeks
  • Jet Fuel Demand Fell 3.72% in Past Four Weeks
  • Residual Fuel Demand Rose 10.91% in Past Four Weeks
  • U.S. Gasoline Demand Fell 30,000 B/D Last Week
  • U.S. Distillate Demand Fell 450,000 B/D Last Week

Total U.S. imports of crude 7810k b/d vs 8378k b/d

  • PADD 1: 1330k vs 844k
  • PADD 2: 2428k vs 2741k
  • PADD 3: 2707k vs 3355k
  • PADD 4: 407k vs 352k
  • PADD 5: 936k vs 1086k

Imports into U.S. by country in b/d:

  • Canada imports 3198k vs 3562k
  • Saudi Arabia imports 1178k vs 1363k
  • Venezuela imports 527k vs 618k
  • Mexico imports 402k vs 912k; down 56% w/w
  • Colombia imports 308k vs 169k
  • Ecuador imports 272k vs 266k
  • Nigeria imports 228k vs 148k
  • Kuwait imports 64k vs 47k
  • Iraq imports 617k vs 651k
  • Angola imports 91k vs 22k

* * *

The reaction was a kneejerk to the lows of the day (with stocks at the highs) and then the standard machine-driven ramp…

 

But Gasoline pricesd are plunging…total gasoline demand fell to the lowest level since February 2014.

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