Well, crude has had an interesting 24 hours.
You’ll recall that oil took a tumble on Tuesday after a Bloomberg survey showed production from OPEC members increased 210,000 barrels per day in July.
“The $50-level for WTI is a psychological level. People are really beginning to realize that the market probably needs a steady beat of bullish information to continue to rally,” Gene McGillian, market research manager at Tradition Energy, said. “If we don’t get a really positive inventory report this week, the market is vulnerable to a nice little turnaround.”
Well, we got the weekly inventory data and it wasn’t necessarily what one might call “really positive.” These were the API numbers:
- Crude inventories +1.78M bbl last week
- Cushing +2.56m bbl
- Gasoline -4.83m bbl
- Distillates -1.23m bbl
And we got this from the EIA this morning:
- Crude -1,527k Bbl, Median Est. -3,100k Bbl
- Cushing crude -39k
- Gasoline -2,517k vs est. -1,000k
- Distillates -150k vs est. -900k
So obviously that’s better (i.e. more bullish) than the API numbers, but it was still a smaller draw than expected and production was still, well, rising.
Bloomberg’s Javier Blas had some amusing live commentary as the report hit, including these fun soundbites:
Not a great report for the bulls!
Where are the OPEC cuts? U.S. imports of Saudi Arabian crude jump again, with a 242,000 barrels a day increase over the week to 1.174 million b/d. On top of that, Iraq returns above the 1 million b/d mark, plus 273,000 b/d more than the previous week. This has pushed total U.S. oil imports to 8.3 million b/d last week, roughly similar to the level of a year ago, despite months of OPEC and non-OPEC cuts.
Specifically, he’s referencing these two charts:
And Blas was back to note the hilarious dip buying that occurred (and is now customary) after the initial knee-jerk lower:
So you know, just another batshit day in crude, where everyone is super-bullish one minute and super-bearish the next and where the algos have the same schizophrenic tendencies, only they express them in milliseconds, instead of minutes.