WTI prices kneejerked higher after last night’s h
uge crude inventory draw reported by API but prices have leaked lower into the DOE print. Expectations were for a 4th straight weekly draw in crude (thanks to robust refining activity) were confirmed with a 7.2mm inventory drop (less than API’s 10.2mm), and Gasoline also saw a major draw (as opposed to API’s build). However, exuberance ion WTI is not evident as Lower 48 production surge above 9mm barrels for the first time since July 2015.
API
DOE
While everyone was exuberant about API’s crude draw the gasoline was notable, but DOE data dismissed that with draws across the entire complex…Refiners kept up at a seasonal record pace, using 17.6 milion barrels of crude and feedstocks. That’s way above previous years. The peak season should last another month or so, before plants start to shut units for maintenance.
Bloomberg’s David Marino notes that for a second week, no oil came out of the Strategic Petroleum Reserve, according to the Energy Department, after about 16 million barrels hit the market since early March. Without that buffer, U.S. commercial stockpiles would likely have drawn down even quicker.
For the bulls, Bloomberg’s Javier Blas notes that the good news is that oil inventories decreased across the board; the bad news is that shipments from Saudi Arabia rebounded considerably last week. Riyadh shipped 932,000 barrels a day to the U.S., up from a 7-year low of 524,000 barrels a day two weeks ago. Shipments from Iraq were also very strong, although Kuwait sent far less crude into the U.S.
