Thursday November 17, 2016
- Crude Oil - build of 5.3 MMbbls (versus expected build of 1.5 MMbbls)
- Gasoline - build of 0.7 MMbbls (versus expected draw of 0.4 MMbbls)
- Distillates - build of 0.3 MMbbls (versus expected draw of 1.7 MMbbls)
High levels of imports affected each of these groups, including a fairly massive bump in gasoline imports. This likely due to cargoes that were fixed a few weeks ago right after the Colonial Pipeline explosion, when the market was uncertain about East Coast gas supply. The gasoline was loaded and on the way here when the pipeline was fixed, and thus all of this extra gasoline has arrived without the anticipated shortage. Refineries are ramping up rates, post-Fall maintenance season, which should limit crude oil builds going forward but will also contribute to finished product builds.
As expected, prices dropped considerably right after the data came out, but 'five minutes' later the Russian / OPEC headline caused a swift reversal. December WTI traded in a range of $1.25 after both data points came out. With the official OPEC meeting now just two weeks away (November 30 in Vienna, Austria), expect to see more and more headlines appear (both bullish and bearish, depending on who is being quoted). By noontime on Wednesday, the December WTI contract was essentially flat on the day and settled close to that (ultimately at $45.57, down 24-cents). RBOB and Heating Oil posted losses of about a penny, though gasoline through the system (NYMEX and cash differentials) is weak.
PUBLISHED BY PAPCO, INC. (PAPCO)
PAPCO Newsletter Disclaimer. The information that is published in this newsletter, including the market reports, is derived from trade, statistical, and other sources that we believe are reliable and accurate. However, PAPCO does not guarantee the completeness, accuracy, or reliability of such information, and information should not be relied upon as such. Additionally, PAPCO assumes no responsibility for the material contained in the newsletter and the views expressed therein. Further, PAPCO expressly disclaims any express or implied warranties or guarantees with regard to such information. The information contained in this newsletter and any views expressed herein are provided for your informational purposes only and should not be interpreted in any way as an offer, invitation to make an offer, inducement, or recommendation to buy or sell options contracts, commodity futures, products, or any other type of security.