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WTI bounced off $65 this morning but RBOB is lower after API's unexpected build in gasoline as all eyes remain focused on Vienna and any OPEC headlines. However, DOE reported the biggest draw in crude since Jan (but another weekly build in Gasoline and Distillates).

“The market is in a holding pattern awaiting OPEC decisions and tethered very closely to the stock market, which is crumbling,” said Thomas Finlon, director of Energy Analytics Group LLC in Wellington, Florida.

API

  • Crude -3.016mm (-2.475mm exp)

  • Cushing -1.594mm (-450k exp)

  • Gasoline +2.113mm

  • Distillates +750k

DOE

  • Crude -5.914mm (-2.475mm exp) - biggest draw since Jan

  • Cushing -1.296mm (-450k exp) - biggest draw since Feb

  • Gasoline +3.277mm

  • Distillates +2.715mm - biggest build since Feb

Following inventory draws across the board last week, very mixed bag this week with crude seeing the biggest draw since Jan (over double expectations) and products seeing big builds...

Gasoline stocks are near 5Y highs for this time of year and bucking the seasonals...

 

The WTI-Brent spread has pushed back down to $10...

And the Permian Pipeline constraints remain a problem...

 

Which perhaps explains why US crude production was unchanged (at a record high) on the week...

 

$65 seemed to trigger another wave of buying this morning ahead of the DOE data... as RBOB (lower) and WTI (higher) diverged into the EIA print...and diverged further after...

Bloomberg's Alex Longley also notes that oil traders have been taking money off the table in the run-up to this week's OPEC meeting. With WTI open interest at a two-month low and trading volumes below the 50-day average, volatility will probably continue to pick up as markets are more exposed to knee-jerk reactions to headlines from Vienna.