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WTI/RBOB Slide After Crude Inventory Hits Record High, Production Tops 9 Million Barrels

After API’s surprise draw across all major categories, DOE reported the 7th weekly crude build in a row (even as crude imports plunged). Gasoline, Distillates, and Cushing all saw draws even as crude production rose to new cycle highs – back above 9mm bbl/d.

 

API

  • Crude -884k (+3.3m exp)
  • Cushing -1.7mm
  • Gasoline -893k (-1.5mm exp)
  • Distillates -4.229mm

DOE

  • Crude +564k (+3.25m exp)
  • Cushing -1.528mm (-50k exp)
  • Gasoline -2.628mm (-1.5mm exp)
  • Distillates -4.924mm (-1.0mm exp)

7th weekly crude buiod in a row but major draws across the other categories…

Notably, Bloomberg’s Javier Blas points out that U.S. refinery intake traditionally reaches a seasonal bottom between the second half of February and the first half of March. Last week intake, at just 15.5 million, was already low already and any further reduction would make a big increase in crude stocks more likely.

Furthermore, some crude that was on floating storage in so-called contango deals is coming now in-land, increasing imports; but U.S. Crude oil exports rose above one million barrels a day for the first time on record the week ended Feb. 10. WTI averaged $2.26 a barrel below global benchmark Brent this year, making U.S. crude more attractive to overseas buyers.

As a reminder, US crude inventories are already at a new record high…

 

As are gasoline inventories…

 

Refinery Utilization tumbled to its lowest since April 2013…

 

Production remains on a rising trend – back above 9mm barrels/day, tracking the lagged rig count and suggesting – noise apart – considerably more production to come…

 

WTI and RBOB rallied overnight following the API data and while both initially spiked on the print, they are falling now

 

Finally we remind readers of what happens next…for the last four weeks, bang on at the 3:45 pm London time, the algo emerged when bearish EIA figures also triggered buying.

Just like it did last week…

 

And the week before…

 

And the week before that…

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