WTI Crude Extends Losses As Production Rises & Inventories Unexpectedly Build

crudeoilTyler Durden:  Last night’s surprisingly large inventory build reported by API (+2.9mm vs expectations of -2.5mm) sent hopeful crude prices reeling (not helped by comments from Iran and Saudi this morning).

Following last week’s huge 5.9mm draw, DOE reports a 2.63mm build (confirming API’s data). Cushing (which API reported as a 923k build) also saw DOE report a 0.9mm barrel build (pushing closer to its limits).

As we have detailed previously, December typically sees major drawdowns in inventory as energy firms attempt to minimize tax burdens into year-end. December 2015 has seen a notably lower-than-expected drawdown.

  • *CRUDE OIL INVENTORIES ROSE 2.63 MLN BARRELS, EIA SAYS

Total crude inventory rose notably in the last week – very much against the seasonals. This is the month when drawdowns are supposed to be the largest.

 

Cushing inventory rose once again:

  • CUSHING CRUDE INVENTORIES RISE TO RECORD 63M BBL, EIA SAYS
As Global oil invemntories near storage limits…

 

Crude production has been “steadily rising” for the last few weeks…not what they need at all!

 

WTI Crude prices rallied up to $38 – the scene of the crime before a huge build 2 weeks ago sent prices falling – then tumbled overnight after API. The DOE data has confirmed that build and losses are extending…

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Finally, do not forget – December ALWAYS see notably drawdowns as firms lighten up inventories on their balance sheet ahead of year-end to reduce tax burdens.

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