Oil prices extended gains this morning, despite the across-the-board builds reported by API last night, following comments from the IEA cautioning that prices could rally next year amid a tightening market.
“Positioning is now much less distorted than it has been for a while, and hence, perhaps for the first time in six months, short-term risk-reward is now skewed toward higher prices,” Standard Chartered analysts including Emily Ashford wrote in a report.
Given the big builds reported by API, all eyes will be on the official data now (especially considering the massive SPR draw last week) as inventories have slipped.
API
Crude +7.819mm (-3.913mm exp) – biggest build since 10/7
Cushing +640k
Gasoline +877k
Distillates +3.9mm
DOE
Crude +10.23mm (-3.913mm exp) – biggest build since March 2021
Cushing +426k
Gasoline +4.496mm
Distillates +1.364mm
API reported builds across the board last night (after 4 straight weeks of sizable draws) and official DOE data confirmed it with a massive 10.23mm barrel build in crude stocks. Additionally there were builds at Cushing and in products…
Source: Bloomberg
Total US Crude stocks (ex-SPR) rebounded from their lowest since March (and near the lowest since 2018), but given the collapse in the SPR, total inventories must be near record lows.
Source: Bloomberg
SPR released 4.7 million barrels (~675,000 b/d). That’s the largest weekly release since early October. It puts the SPR at just 382.3 million barrels, the lowest since January 1984…
Source: Bloomberg
The big SPR draw helped to reduce the nationwide crude build to 5.5 million barrels. Even by that measure, the combined commercial and SPR build was still equal to the biggest increase seen since March 2021.
Source: Bloomberg
US gasoline product supplied on a four-week rolling basis fell to their lowest seasonal level since 1998, barring 2020.
Crude production dropped very modestly last week..
Source: Bloomberg
WTI was trading just above $76.50 ahead of the official data, having shrugged off the big API-reported builds, but plunged on the official data…
Crude is still on track for its first back-to-back quarterly decline since mid-2019 on concerns about the global economic outlook, with thin liquidity in the oil market exacerbating price swings.
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