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US Crude Oil Stockpile Reaches Record High, Production Hits 20-Month Lows

Courtesy of ZeroHedge View original post here.

WTI is trading lower this morning after API's report signaled a surprise jump in crude inventories, underscoring the market’s patchy road to rebalancing.

“Indications from the American Petroleum Institute show that stocks built quite a lot,” said Rystad Energy head of oil markets Bjornar Tonhaugen. “Shut-in production returning and a rise in Covid-19 cases scare traders — and markets.”

All eyes now focused on the official data to see if API's data was right (both crude and distillates which saw a big build – not a good sign in working off the stubborn diesel glut that is holding back the oil market’s broader recovery…

API

  • Crude +8.42mm (-1.2mm exp)

  • Cushing -2.285mm

  • Gasoline -2.913mm (-200k exp)

  • Distillates +4.271mm (+2.9mm exp)

DOE

  • Crude +5.72mm (-1.2mm exp)

  • Cushing -2.279mm

  • Gasoline +866k (-200k exp)

  • Distillates +1.568mm (+2.9mm exp)

DOE data confirmed API's reported surprise crude build, but at 5.72mm it was less than API's. Distillates also saw another build – the 10th weekly build in a row)…

Source: Bloomberg

Notably, as Bloomberg's Julian Lee explains, with space in the Strategic Petroleum Reserve being rented out to producers, it is vital to include movements of crude into and out of the reserve in assessments of stockpile movements at this time.

And total crude stockpiles, including commercial and SPR inventories, rose by 8 million barrels last week, that’s the second largest build in the past six weeks.

Source: Bloomberg

EIA actually reports that U.S. Crude Oil inventories rise to record highs at 538.1M Bbl.

Source: Bloomberg

Crude production slipped lower, not helped by storm Cristobal which prompted operators to shut ahead about a third of the total output (but these are temporary and will rebound the week after)…

Source: Bloomberg

WTI traded around $38.00 ahead of the DOE print and trading down below it on the confirmed build…


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