Following last week's biggest crude build since 2016, API reports another large crude draw (seemingly confirming refinery run rates remain high), but WTI/RBOB prices slipped lower on an unexpectedly large build in Gasoline (and Distillates).

Genscape reported a 750k draw at Cushing last week...

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API

• Crude -4.62mm (-3.25 exp) -0 9th weekly build in a row
• Cushing -1.56mm (-593k exp) - biggest draw since Oct '16
• Gasoline +4.08mm (-50k exp) - biggest build since Jan '17
• Distillates +1.75mm

Following last week's biggest build since 2016, API reported a 9th weekly draw in Crude but Gasoline saw its biggest build since Jan 2017, very much against the recent trend...

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Notably WTI rallied back today (on weak dollar) to recover the post-Qatar losses...(despite EIA upping its 2018 US Crude output estimate above 10mm b/d for the first time...EIA sees US crude production at 9.81mbpd (was 9.74) in December 2017 and at 10.29mbpd in December 2018...) but once the API data printed both WTI and RBOB started to fade... 

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And RBC is upset at this volatility... There’s a "fundamental knowledge gap" occurring in the oil market as many traders are reacting to headline data on items including storage instead of understanding the breakdown of production and fundamentals, RBC’s commodity strategist Mike Tran said in presentation during RBC’s conference in New York earlier.

Tran adds that less physical traders exist in the market along with less pure-play energy commodity hedge funds; banks have also scaled back commodity trading units.