Technical & Fundamental Oil Reports Specialists

Follow us

Crude on its knees

Published Thursday, August 20th, 2015

A build of 2.6 million in weekly US crude oil stocks is not normally a big event but it is when prices are already under huge pressure and expectations had been for a draw. No matter that 1.2 million bbls of the build was in the isolated PADD5 area, a build of any magnitude was unwelcome and comes as a big blow to a market already on its knees.

Adding to the gloom there was a build at Cushing of 326,000 bbls taking stocks there to 57.4 million bbls, an enormous 37 million bbls above last year’s level and an encouragement for everyone to update their tank tops calculations. Analysts had expected two pipeline interruptions in the North to have a bigger impact than the CDU shutdown at Whiting, but they were wrong.

Total commercial stocks built by 800,000 bbls taking them to 14% above last year’s level and 12% above the 5-year average. Gasoline drew 2.7 million bbls and distillate built 600,000 bbls. Gasoline has often come to the rescue of the market in the past but not yesterday despite the big draw. RBOB closed down 8.76 cts/gal (155.92) and September WTI lost $1.82/bbl to close at $40.80/bbl having fallen to $40.40/bbl at one point. This is the lowest close since March 2nd 2009 on front-month WTI.

to read the rest of the report, please click here

Posted by David Hufton