Crude prices are lower this morning following API's huge reported build at Cushing (biggest since 2008) and fears over OPEC deal realities. With expectations for a crude draw (on lower imports), DOE confirmed a bigger than expected overall draw but also Cushing saw a 3.78mm barrel build - the biggest since Jan 2009. Both Distillates and Gasoline (most since Jan) also saw bigger than expected builds as US production dropped very modestly.

API

• Crude -2.21mm (-1.37mm exp)
• Cushing +4.01mm (+2.87mm exp) - biggest since 2008
• Gasoline +828k (+1.59mm exp)
• Distillates +4.08mm (+1.24mm exp)

DOE

• Crude -2.389mm (-1.37mm exp)
• Cushing +3.783mm (+2.87mm exp) - biggest since Jan 2009
• Gasoline +3.425mm (+1.59mm exp) - biggest since Jan 2016
• Distillates +2.501mm (+1.24mm exp)

Biggest Cushing build since Jan 2009 offsets the bigger than expected draw in crude overall...

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Here is the breakdown, courtesy of Reuters.

Commercial crude stocks -2.4 million bbl to 486 million bbl last week, now +32 million bbl (+7.1%) above prior year level

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Crude imports jumped last week to 8.3 million b/d, up from 7.5 million b/d the prior week. 

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Gasoline stocks rose +3.4 million bbl to 230 million bbl last week and are now +11.9 million bbl (+5.4%) above 2015 level: 

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Distillate stocks rose +2.5 million bbl to 157 million last wk at time of year when they would normally be falling thanks to warm weather 

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As Bloomberg notes, demand for petroleum products fell to the lowest levels since February. Not uncommon for this time of year. 

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As the US rig count continues to rise so the trend of US crude production has turned, but it dropped very modestly over the last week... 

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And the reaction in crude (after overnight weakness but energy stock strength) was evident, breaking back below $50... 

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Energy stocks - which were up almost 1% with oil already lower - have tumbled back to unch... 

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In context, OPEC deal gains are disappearing... 

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Notably the surge in Cushing inventories has put more pressure on the front-month spread... 

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