WTI/RBOB Stumble After Mixed Inventory Data, 16th Straight Week Of Increased Crude Production

WTI/RBOB prices were relatively unchanged from last night's API inventory print (despite some volatility from OEPC headlines) ahead of the DOE print, but that did not last long as Crude saw a much bigger than expected draw (-4.43mm vs -2mm exp) and gasoline a considerably smaller draw than API (-787k vs -3.18mm API) and the same with distillates. Lower 48 crude production rose for the 16th straight week and seemed to take the shine off the inventory data – sending WTI/RBOB prices lower.



  • Crude -1.5mm (-2mm exp)
  • Cushing -210k
  • Gasoline -3.15mm (-1.08mm exp)
  • Distillates -1.85mm


  • Crude -4.43mm (-2mm exp)
  • Cushing -741k
  • Gasoline -787k (-1.08mm exp)
  • Distillates -485k (-493k exp)

Crude's 7th weekly draw in row was much bigger than expected, but Gasoline only saw amodest draw…


Bloomberg's Mitchell Martin notes that gasoline stockpiles are more than 9% above the five-year average. Summer driving season will likely take on greater significance this year, but gasoline consumption may rise less than 1% from last year's level. Bloated distillate inventories are being relieved by exports, but stockpiles remain 15% above the five-year average, even with demand from railroads and industrial users helping to boost consumption to a five-year high in April.

Bloomberg's Laura Blewitt notes that we can thank Gulf Coast refiners for that massive crude draw. PADD 3 refinery crude runs rose to the highest on record in data going back to 1992.

This is the 16th straight week of increased crude production from The Lower 48, as output tracks the lagged surge in oil rig counts. Production rose from 8.795mm to 8.815mm last week, highest since Aug 2015

Javier Blas points out that the U.S. continues to import lots of crude from Saudi Arabia, despite the OPEC production cuts (creating a bit of mismatch between the rhetoric here in Vienna about the curbs and what refiners receive). Last week, U.S. refiners bought 1.371 million barrels a day from the kingdom, largely unchanged from the previous week (1.376 million). Shipments from Iraq fell significantly, but they were offset by a surge in Kuwaiti arrivals. All in all, Middle East crude appears to be plentiful in the U.S. Something OPEC will likely need to explain tomorrow at its official meeting.

Gasoline (big build) was higher heading into the DOE data, crude was lower as ovenight streength faded after OPEC's Vienna meetings ended with no statement today. Bloomberg's Laura Blewitt points out that summer driving season arrives this weekend. This year comes with a unique price trend: the typical 50-cent spring surge in gasoline prices hasn't happened. The reaction to the DOE data was clear – WTI up, RBOB down…BUT that did not last as both are lower now on the lack of product demand.


Bloomberg notes that crude is on a nice bullish streak, not huge gains but steady daily ones. In the five days through Tuesday, WTI gained 41, 28, 98, 40 and 34 cents. The flip to July delivery also helped the front-month contract, pushing it to the highest settlement since April 18. Aggregate volume hasn't been rising with the price, though. Both days this week were under 1 million trades after being over a million from May 2 to May 19 with the exception of May 12, when volume totaled 999,989.

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