Sign up today for an exclusive discount along with our 30-day GUARANTEE — Love us or leave, with your money back! Click here to become a part of our growing community and learn how to stop gambling with your investments. We will teach you to BE THE HOUSE — Not the Gambler!

Click here to see some testimonials from our members!

WTI Holds Overnight Gains After Huge Crude Draw, Record Exports

Courtesy of ZeroHedge View original post here.

With oil prices surging on fears from possible “severe retaliation” after the killing of Iran’s Soleimani, some wonder if this morning’s inventory and production data will impact prices at all. We suspect it will.

“This is more than just bloodying Iran’s nose,” Stephen Innes, chief market strategist at AxiTrader Ltd. said in a note.

“This is an aggressive show of force and an outright provocation that could trigger another Middle East war.”

Analysts are expecting another crude draw in the last week (the 4th in the last 5 weeks) after API reported a major drop in crude inventories.

API

  • Crude -7.8mm – biggest draw since August

  • Cushing -1.4mm

  • Gasoline -776k

  • Distillates +2.8mm

DOE

  • Crude -11.46mm (-3mm exp) – biggest draw since Aug 2018

  • Cushing -1.449mm – 8th weekly draw in a row

  • Gasoline +3.212mm – 8th weekly build in a row

  • Distillates +8.776 – biggest weekly build since Jan 4th 2019

As a reminder, historically, December would be when the Texas oil industry drains crude stocks ahead of year-end tax assessments, known also as ad valorem. However, the massive 11.46mm barrel crude draw is exceptional and we note that Distillates inventories exploded higher (most in a year)

Source: Bloomberg

The lion’s share of the massive crude draw came from the Gulf Coast, where inventories fell by more than 11 million barrels…likely due to the huge spike in crude exports…

Source: Bloomberg

US Crude production hovers near record production as the rig count resumes its drop…

Source: Bloomberg

WTI was holding around $63.25 ahead of the DOE data, above the level it spiked to after the Abqaiq attack…

Source: Bloomberg

But there was little reaction to the actual data…

“This is a seismic event in the region,” said Jason Bordoff, a former Barack Obama administration official who now works for Columbia University.

“This is how U.S.-Iran tit-for-tat spirals out of control. Iran’s response will be severe and deadly. And certainly may include escalating attacks on energy infrastructure.”

Still, as Bloomberg notes, the rally could just as easily subside. While prices initially soared after the attack on Saudi Arabia’s Abqaiq processing facility in September, crude then retreated in another sign that the market’s psychology has shifted from fearing supply shortages to a concern with a surplus, largely because of the U.S. shale revolution.


Do you know someone who would benefit from this information? We can send your friend a strictly confidential, one-time email telling them about this information. Your privacy and your friend's privacy is your business... no spam! Click here and tell a friend!





You must be logged in to make a comment.
You can sign up for a membership or get a FREE Daily News membership or log in

Sign up today for an exclusive discount along with our 30-day GUARANTEE — Love us or leave, with your money back! Click here to become a part of our growing community and learn how to stop gambling with your investments. We will teach you to BE THE HOUSE — Not the Gambler!

Click here to see some testimonials from our members!