A small sell-off on Oil after API

25 January, 2017

After a closing bell on Wall Street, API issued a weekly report on Crude Oil inventories in the US. The report is pretty bearish for oil. Inventories rose by 2.93mln bbl with expectations at 2.5mln. If the data is confirmed it will be the 3 consecutive week of growth. The last such a long period of growth happened in November.

There is a distinct divergence between API and DOE reports in the recent weeks. However a rebound of production and smaller demand for crude from refineries and reduced demand for petroleum products from consumers, inventories should rise (consensus at +2.5mln), source: BBG, XTB

Inventories at Cushing (the delivery point ant the biggest US oil storage hub) fell by 145k barrels, far less than expectations (-500k). However the biggest bearish factor in the report is the growth in petroleum products inventories. Gasoline inventories rose by 4.85mln bbl which is in line with the seasonal factors. Distillates inventories rose by 1.95mln bbl after the recent significant drop. DOE report due 15:300 will be crucial for oil prices. 


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