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Russia Has deployed a Land-based Cruise Missile That Violates the “spirit and Intent” of Intermediate-Range Nuclear Forces


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WTI/RBOB Surge After Massive Gasoline Draw (Despite Record Crude Glut)

Following API’s reported massive build in crude (and draw in gasoline), DOE confirmed the extreme moves with a major 8.2mm crude build and a massive 6.56mm draw in gasoline (the biggest since April 2011). US Crude production rose once again – to 13-month-highs.


  • Crude +11.6mm (+1.4mm exp)
  • Cushing +788k
  • Gasoline -5.00mm
  • Distillates -2.9mm


  • Crude +8.21mm (+2mm exp)
  • Cushing +867k (+406k exp)
  • Gasoline -6.56mm (-1.99mm exp)
  • Distillates -925k (-1mm exp)

This is the 9th weekly rise in crude inventories (some chatter on API data including SPR barrels but that was marginal at best compared to the headline print)…The gasoline draw is the biggest since April 2011


Notably West Coast (PADD 5) CRUDE STOCKS INCREASE 4.65M BBL, MOST SINCE OCT. 1999 ..

Bloomberg’s Bert Glibert notes that based on bill of lading data, the biggest sources of waterborne barrels to PADD 5 last week were Ecuadorian Napo and Kuwait Crude oil.

This is a new record high for US crude inventories…“Inventory drawdown slower than I thought after cuts,” Saudi Arabia’s Khalid Al-Falih admits.


Putting the 2017 surge in context, commercial crude stocks are now up 49 million barrels YTD, compared to 38 million in 2016 and a 22MM average over the past decade according to Reuters.

In the last week, oil imports accelerated to 8.15MMbpd from 7.6MMbpd the week before.

However, offsetting the spike in crude imports, gasoline imports fell to the lowest level since 1999.

Meanwhile, US crude production continues to trend higher with lagged rig counts, even as Saudi oil minister Khalid Al-Falih had complained that “the green shoots in the U.S. are growing too fast.” In the latest week, US Crude production rose by another +56k b/d, or +0.6% W/W to 9.088MMbpd

This means that US oil production, which is again rapidly rising on leaner, more efficient production technologies, is now just 5.5% below its lifetime high, a level it will surely overtake rapidly should the price of crude not tumble from current levels.

And as a reminder, the EIA published another bullish outlook for U.S. oil production in yesterday’s Short-Term Energy Outlook. It raised the 2017 year-on-year increase in crude and condensate production to 330,000 b/d from its previous assessment of just 100,000 b/d and now sees output above 10 million barrels a day by the end of 2018. Rebalancing the market is getting more difficult.


Notably the RBOB bounce (on API inventory draw) had been largely erased before the DOE data (and WTI had extended losses)…but the better than API crude build and huge gasoline draw triggered panic buying…

Bloomberg’s Vince Piazza warns U.S. inventories across the product value chain remain elevated, with crude oil 39% above the five- year average and distillates, jet fuel and gasoline between 5.5% and 22% higher. This, along with the 51% rebound in rig count since last year, and the robust level of more than 5,300 DUCs (drilled yet uncompleted wells) implies the near-term return of U.S. hydrocarbon volume with an environment of lower range-bound prices.

It appears traders are starting to realize…

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US <b>Crude Oil</b> Inventories 8.209M vs. 1.967M forecast

In a report, Energy Information Administration said that U.S. Crude Oil Inventories rose to a seasonally adjusted annual rate of 8.209M, from 1.501M in …The post US <b>Crude Oil</b> Inventories 8.209M vs. 1.967M forecast appeared fir…

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Gazprom To Seek First Eurobond Issue Since Sanctions

Russia’s gas giant Gazprom has hired banks to set up investor meetings in the U.S. to test the market for a possible U.S.-dollar denominated Eurobond issue, which would be the first since the U.S. and the EU slapped sanctions on Russia three years ago, over the annexation of Crimea. According to Thomson Reuters’ market analysis service IFR, Gazprom would hold a roadshow in Los Angeles and New York next week, which could be followed by the issue of a U.S.-dollar denominated Eurobond of a benchmark size. According to IFR, Gazprom has…

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Q1 GDP At Risk As Wholesale Inventories Tumble Most In A Year

After surging in November and December, January’s final wholesale inventories print showed a 0.2% decline – worse than expected and the weakest since Feb 2016. This negative ‘hard’ data point just piles on the weakness being forecast for Q1 GDP (but don’t let that stop The Fed hiking).

Nov/Dec saw the “if we build it, they will come” economy surge in inventories on Trump hope…


But they didn’t – Wholesale sales tumbled 0.3% in January… (though we note YoY, sales rose significantly thanks to that spike in December)


The ‘field of dreams’ economy is stumbling in Q1. We expect Atlanta Fed to slash its GDP forecast further…


On the semi-silver-lining front, the ‘gap’ between sales and inventories has shrunk

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