WTI/RBOB prices have fallen after a brief pop on last night's API data but knee-jerked higher after DOE reported a bigger than expected crude draw (9th straight week). Cushing saw its biggest draw ever and Distillates surprised with a draw as US crude production bounced back.

Ahead of the DOE days, Bloomberg noted the market's anxiety: A ninth-consecutive crude draw would be helpful, but a tenth consecutive weekly gasoline build would not. And a fifth straight distillate build would add more bearish sentiment. Survey data already see sizable builds in both product categories, and figures coming in showing larger builds could have bulls questioning the insanely long positioning of the crude market.

API

• Crude -5.121mm (-3.15mm exp)
• Cushing -3.936mm (2.5mm exp)
• Gasoline +1.782mm
• Distillates +609k

DOE

• Crude -6.86mm (-3.15mm exp) - 9th straight week of draws
• Cushing -4.184mm (2.5mm exp) - biggest draw ever
• Gasoline +3.62mm - 10th straight week of builds
• Distillates -3.887mm - biggest draw since Oct 20th

Another crude draw and another gasoline build but Cushing's 4.18mm draw is the largest on record. Distillates surprised with a draw that is perhaps weather-driven as several refiners were shut in...

That cold snap across the eastern US is showing its effects on heating fuel. Distillate demand soared the most for any week since 2000, to the highest level in a decade.

That surprise distillate draw didn't seem to come from exports which actually dropped last week, but, as Bloomberg's Bert Gilbert notes, the chart below shows that product supplied for diesel last week hit the highest level since February 2008.

As Bloomberg's Javier Blas notes, one important note: the EIA is making use of its adjustment factor (effectively, a way to hammer all the supply and demand figures). The factor has gone from -489,000 barrels a day last week to a positive of 481,000 barrels a day this week. It's a big swing that puts into question some of the data.

US Crude production bounced back from weather-impacted drop but remains below record highs...

Surging shale production is poised to push U.S. oil output to more than 10 million barrels per day - toppling a record set in 1970 and crossing a threshold few could have imagined even a decade ago. But, as Reuters notes, this new record, expected within days, likely won’t last long. The U.S. government forecasts that the nation’s production will climb to 11 million barrels a day by late 2019, a level that would rival Russia, the world’s top producer.

WTI/RBOB prices are bouncing back from overnight weakness on the DOE data...