After seeing the price action of crude, I had to take another look at the EIA report thinking I saw an old one. Interesting reaction, though the price drop is obviously related to something else.
Good point Jim,
For sure something else as the EIA report was pretty bullish for crude.
OLD BRIDGE, N.J. (DTN) -- Oil futures nearest to delivery traded on the New York Mercantile Exchange and Brent crude on the Intercontinental Exchange continued lower in late morning trade. West Texas Intermediate is trading near a two-week low despite bullish data from the Energy Information Administration showing commercial crude oil stocks declined 12.6 million bbl during the week ended July 6, more than an earlier estimate from the American Petroleum Institute showing a 6.707 million bbl inventory decline.
EIA said commercial crude oil inventories declined to a three-year, four-month low of 405.2 million bbl during the week profiled, 3% lower on the week, though still down 18.2% from year ago levels. Stocks at Cushing, Oklahoma, the delivery point for the NYMEX WTI contract, declined for an eighth straight week, down 2.062 million bbl to a fresh 3-1/2 year low at 25.718 million bbl. API reported a 1.952 million bbl decline at Cushing.
Gasoline inventories dropped 694,000 bbl to 239.0 million bbl, significantly less than API's expected 1.59 million bbl decline as exports jumped 487,000 bpd to a better than seven-month high of 1.186 million bpd. Implied demand slid 594,000 bpd from a near record high to 9.275 million bpd, reflecting pre-stocking in the previous week leading up to the Fourth of July holiday. Gasoline production was reported at a record high 10.699 million bpd, up 388,000 bpd.
EIA said distillate stocks rose 4.1 million bbl to 121.7 million bbl, significantly higher than API's estimate for a 1.952 million bbl build. Distillate fuel supplied to market fell 321,000 bpd to 3.805 million bpd.
Wider view of Crude(lowest stocks in over 3 years):
Gasoline ending stocks are still very high:
Heating Oil stocks are the most bullish of the 3. The lowest for the end of June since 2005!
Crude 3 month chart
Crude 1 year chart below
Crude 5 year chart below
Crude 10 year chart below
Oil continuing lower today:
After yesterdays collapse I wasn't expecting much strength today. Next week heading into the EIA report might reverse the trend as the fear of another large drop in supplies might incite some buying.
Still trying to understand this level of selling following such a bullish EIA. Do we have an understanding of that, or is it just some "whim of the market"?
"The biggest weekly drop in U.S. crude supplies couldn’t halt the drop in oil prices Wednesday as traders chose to focus on expectations for higher global output.
On Wednesday, the Energy Information Administration reported a 12.6 million-barrel drop in U.S. crude supplies for the week ended July 6. That was more than double the 4.8 million-barrel decline expected by analysts polled by S&P Global Platts and marked the biggest single week increase since September 2016."