Technical & Fundamental Oil Reports Specialists

Follow us

First US crude stock draw in 11 weeks fails to provide price support

Published Thursday, December 10th, 2015

It was not only the first fall in US crude oil inventories since September that made the latest stock report from the EIA bullish. It was also the fact that total commercial stocks fell 3.6 million bbls. Despite headline product inventories rising (gasoline by 786,000 bbls and distillate by 5 million bbls) it is worth noting that the so-called “other products“ category which includes oxygenate fuel ethanol, jet fuel, residual fuel oil, propane/propylene and other oil dropped by 5.8 million bbls. As far as crude oil stocks are concerned the big bullish surprise was the USGC where inventories nosedived by 7.3 million bbls as crude oil imports into PADD3 fell by 700,000 bpd.

Although on balance the report was more on the bullish side the initial rally quickly petered out as the underlying bearish sentiment prevailed. WTI settled 35 cents/bbl lower, $1.83/bbl off the day’s high. Brent lost 15 cents/bbl, and Heating Oil 203 points. The less-than-expected build in gasoline stocks helped NYMEX RBOB rally 281 points on the day. Some price support is seen this morning as Saudi Arabia has reportedly cut January Extra Light supply to some Asian customers although the full contractual volume will not be affected as it is replaced by Arab Light. Additional upside momentum is also coming from sustained buying in the front-month RBOB contract which is up by some 450 points at pixel time.

to read the rest of the report, please click here

Posted by Tamas Varga

Tamas Varga has been in the oil industry since 1992 and with PVM for 18 years. During his time in the industry he has gathered a range of experience in the oil markets. At PVM Tamas is in charge of data collection and analysis.