WTI Slumps As Postponed OPEC Conference Trumps Crude Inventory Surprise

While all eyes are focused on Vienna and the OPEC+ meeting, inventory data will likely not be completely ignored following Tuesday's surprise API-reported crude build.

With refinery utilization surging, there’s a danger of an oversupply of gasoline, says Bob Yawger, futures director at Mizuho Securities USA. “The market needs to see a draw”.

API

  • Crude +5.36mm (-900k)
  • Cushing +1.44mm
  • Gasoline +3.61mm
  • Distillates +4.32mm

DOE

  • Crude -7.323mm (-2mm exp) - biggest crude draw since July
  • Cushing+1.729mm
  • Gasoline +1.699mm (+1.75mm exp)
  • Distillates +3.811mm

The 10-week trend of crude builds is over as DOE reports a surprisingly large 7.3mm barrel draw (the most since July) but at the same time builds were notable at Cushing and for products...

(Click on image to enlarge)

Most of the surprise crude draw came from the Gulf Coast - the biggest weekly decline in the region since December 2012.

Oil production growth took a small breather last week after a magnitude 7 earthquake in Alaska struck on Friday, affecting oil producing and transportation assets in the region. Alyeska Pipeline Service shut the 800-mile Trans Alaska Pipeline System for seven hours while Hilcorp Energy temporarily shut some of its operations, which include oil platforms in Cook Inlet.

WTI traded between $50.50 and $51 as we moved into the DOE data (as OPEC pessimism dominated after Saudi Arabia's energy minister backed a smaller-than-expected supply cut) then right before the data, this headline hit - *OPEC WON'T HOLD PRESS CONFERENCE AFTER MEETING TODAY: DELEGATE. However, the big draw prompted some buying in futures...

(Click on image to enlarge)

Finally, here is Bloomberg's latest summary of where things are in Vienna:

  • For now, closed-door talks among the ministers are still ongoing
  • OPEC may propose a production cut of 1 million barrels a day and seek extra contributions from Russia and other non-OPEC members
  • But there appear to be sticking points. Some countries are seeking exemptions from the cuts
  • We're told we may get no communique or press conference today and it'll all be wrapped up after a meeting with OPEC+ countries tomorrow
  • Libya's representative at the talks left the secretariat while the meeting continues, saying he had to catch a flight. Unusual
1 2
View single page >> |

Disclosure: Copyright ©2009-2018 ZeroHedge.com/ABC Media, LTD; All Rights Reserved. Zero Hedge is intended for Mature Audiences. Familiarize yourself with our legal and use policies every time ...

more
How did you like this article? Let us know so we can better customize your reading experience. Users' ratings are only visible to themselves.

Comments

Leave a comment to automatically be entered into our contest to win a free Echo Show.