WTI/RBOB Mixed After Biggest Crude Draw Since 2016, Production Hits 21-Month Highs

Oil prices have roller-coastered since last night’s API report of the biggest crude draw since September (hurricane-impacted), but kneejerked higher after DOE confirmed a big crude draw (though less than API), the largest since Dec 2016 and 8th weekly draw in a row. Distillates saw a surprise build, crude exports hit a record high, and production rose again to its highest since Aug 2015.

API

• Crude -8.67mm (-3mm exp) – biggest since Sept 2016
• Cushing -753k
• Gasoline -1.726mm (-1.5mm exp)
• Distillates +124k

DOE

• Crude -6.43mm (-3mm exp)
• Cushing -747k (-500k exp)
• Gasoline -2.86mm (-1.5mm exp)
• Distillates +394k (-700k exp)

8th weekly crude draw in a row and biggest since Dec 2016… surprise build in distillates

U.S. COMMERCIAL CRUDE STOCKS are drawing down much earlier and harder than normal for time of year pic.twitter.com/WRWVPPrYsU

— John Kemp (@JKempEnergy) June 1, 2017

Bloomberg’s Laura Blewitt notes that Today is June 1st — an important day for Bakken crude. As of today, Energy Transfer’s controversial Dakota Access Pipeline is now in service, providing a key outlet for oil to the U.S. Gulf Coast.

Lower 48 production continues to rise… from 8.815mm to 8.835mm – highest in 21 months…

Rystad Energy says U.S. crude production will exceed 10 million barrels a day before year-end, echoing sentiment from other analysts.  

Crude exports hit a new record high…

Gasoline demand at its highest since the peak last summer – seasonally ahead…

It’s been a week since the OPEC extension deal and prices continue to hold lower… GLENCORE CEO SAYS OPEC HAS LOST MARKET CONTROL DUE TO SHALE – but prices were holding above API lows heading into the DOE print (ticking up into the data)= and bounced higher (though only marginally) on the data…

Close up…