Following API's larger than expected crude draw (and huge product builds), DOE reports massive builds in Distillates (+10mm - biggest sine Jan 2015) and Gasoline (+8.3mm - biggest since Jan 2016) and another big build in Cushing inventories. Crude inventories drew down 7.05mm barrels - confirming API's data. US crude production also picked up and WTI prices tumbled.

API

• Crude -7.431mm (-2mm exp)- biggest draw since Sept 2016
• Cushing +482k (+900k exp)
• Gasoline +4.25mm (+1mm exp)- most since Jan 2016
• Distillates +5.244mm (-800k exp) - most since Jan 2016

DOE

• Crude -7.051mm (-2mm exp) 
• Cushing +1.074mm (+200k exp)
• Gasoline +8.307mm (+1mm exp) - most since Jan 2016
• Distillates +10.051mm (-800k exp) - most since Jan 2015

Total crude stockpiles remain over 35% above the five-year seasonal norm.

(Click on image to enlarge)

Crude stockpiles by region:

• Padd 1, 12.4 million, lowest in almost two years.
• Padd 2, 151.5 million, highest since May.
• Padd 3, 240.5 million, second-lowest since February.
• Padd 4, 23.6 million.
• Padd 5, 50.95 million, about 3 million below the 52-week average.

Bloomberg's Javier Blas warns that - One big caveat reading the data today: there was significant fog last week around the Houston Channel, a key waterway to move both products and crude in and out big refineries. That could have affected the figures.

The other factor disruption this week's figures, as in December, is the fact that U.S. refiners in Texas and Louisiana try to reduce the size of their stocks to lower their year-end tax bill. As such, crude inventories typically drop in December in the region.

Cushing jumps to the highest level since May with the sixth gain in seven weeks.

(Click on image to enlarge)

Bloomberg notes that much of that draw in crude stocks looks to be attributable to imports which dropped by 984 kbbls/d across the US with 612 kbbls/d of that coming in PADD 3, that's a 4,284 kbbls/d drop over the week.

(Click on image to enlarge)

US Crude production continues to generally follow the lagged trend of the rising rig count...

(Click on image to enlarge)

Bloomberg notes that U.S. production has been trending higher since September, with the Energy Information Administration sharply increasing its weekly estimates in November and again December. Newly released monthly data for October shows the EIA underestimated output significantly (weekly figures pointed to 8.5 million barrels a day, while the monthly data was of 8.8 million barrels a day).

WTI tagged $54 this morning - higher post-API data - but is dropping after the huge builds...

(Click on image to enlarge)

And Gasoline futures also...

(Click on image to enlarge)