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Oil Bounces After Surprise Inventory Draw

Wednesday, February 22, 2017 16:56
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(Before It's News)

While OPEC compliance remains key, it appears fundamental over-supply fears are mounting once again. Against expectations of a crude build and gasoline draw, API reported a surprise crude draw but smaller than expected gasoline draw. Cushing also saw a major drawdown and Distillates saw the biggest draw since Oct 2014. WTI and RBOB prices were marginally higher on the print.

API

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

This surprise draw ends the 6 week streak of builds in crude. While gasoline did draw, it was smaller than expected, but Distillates saw the biggest draw since Oct 2014…

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

As are gasoline inventories…

Bob Yawger, director of the futures division at Mizuho Securities USA Inc. in New York, said by telephone. “We’re expecting the API and EIA to report another supply build. The focus is returning to the reality that fundamentally we’re oversupplied.”

WTI was lower (despite weaker dollar post-Fed) and RBOB higher heading into the inventory data but both gained as the drawdowns hit. No panic-buying algo though.

“The big question is, will the Saudis cut even more to maintain the price,” James Williams says, an economist at London, Ark.-based energy-research firm WTRG Economics.



Source: http://silveristhenew.com/2017/02/22/oil-bounces-after-surprise-inventory-draw/

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