Amid Libya headlines and contract rollover, WTI prices were wild heading into the inventory data tonight. Following two weeks of surprising builds in Gasoline inventories, API reports a surprise 3rd weekly build in gasoline inventories, and crude drawing only modestly (in line with expectations). The initial reaction was a kneejerk lower, breaking down the day's wedge.
- Crude -3.595mm (-3.5mm exp)
- Cushing -462k (+300k exp)
- Gasoline +1.402mm (-1mm exp)
- Distillates +2.048mm
Last week confirmed the concerns about building gasoline (even though crude saw a draw) and API shows a 3rd week of builds (and crude's draw was just in line) and Distillates also saw the biggest build since July
Price action was chaotic today heading into the API data and immediately kneejerked lower (breaking down from the wedge)...
“If we are going to get into a new era of instability with Libyan oil production, if it becomes a wild card again, that’s definitely supportive for prices,” Phil Flynn, senior market analyst at Price Futures Group, told Bloomberg, adding, with reference to today's price action, there’s “a little bit of expiration madness. There’s a lot of positioning before the September expiration."