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WTI Extends Intraday Rebound After Smaller-Than-Expected Crude Build

Courtesy of ZeroHedge View original post here.

After yet another day of chaos in crude markets, as indices/ETFs shift their weightings, WTI (June) is flat on the day ahead of tonight's inventory data from API

“The June contract is going to be like what happened with May,” said Tariq Zahir commodity fund manager at New York-based Tyche Capital Advisors LLC.

“You always see contangos when storage starts filling up,” Zahir said. “The spread getting out to these levels is being exaggerated with these funds. Just them selling the June contract and buying the July contract, that alone is going to widen the spread.”

But while the technicals may be driving the insane vol intraday, it's the growing glut that most are focused on.

API

  • Crude +9.978mm (+11mm exp)

  • Cushing +2.486mm

  • Gasoline -1.108mm (+2.7mm exp)

  • Distillates +5.462mm (+3.7mm exp)

This is the 14th weekly crude build (though smaller than expected) and gasoline surprised with a draw after 4 weeks of builds…

Source: Bloomberg

All eyes are on Cushing data too – Crude storage at Cushing has 76m bbl of working storage capacity; inventories totaled ~60m bbl last week, with about ~2m bbl in transit by pipeline, water or rail, meaning remaining 58m bbl held in tank farms at Cushing, implying that storage is 76% full.

WTI (June) was hovering just above $12.50 ahead of the API data and jolted back above $13 after the smaller than expected crude build (and surprise gasoline draw)…

As Zahir notes, “it could go to twenty dollars, it could go to four dollars, it could go negative. You’re in unprecedented times. June could be all over the place.”


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