Crude Oil Price - Nov 15

[dan_s]

The losing streak in WTI was finally broken yesterday. Praise the Lord!

After 12 straight days of prices settling lower than the day before, WTI finally scraped and clawed its way to a small gain of 56 cents. Unfortunately API reported a large build in crude oil inventories (over 8 million bbls) at 4:30 PM ET and that 56 cent gain dropped to a 30 cent gain within 40 minutes. Traders were expecting a large build in storage, so the dip was muted.

Given the cold weather perhaps we will see some reduced production numbers forthcoming, which along with OPEC cut talks may help support oil prices going forward. Canada is already pretty serious about curtailing production and refinery runs should be picking up quite a bit as we head into winter since we are below average on distillates (diesel and heating oil). So maybe we’ll be seeing $60 again before we see $50.

Regarding the API numbers, the overall crude oil build came in at +8.8MM barrels. Cushing had a gain of 726k barrels and if that is confirmed in the DOE stats tomorrow it would be the eighth week in a row that Cushing stocks have increased. As of last week Cushing stocks since September 14th have increased by nearly 12MM barrels. The DOE numbers will be released at 11am ET tomorrow.

The tanks at Cushing are only 60% full. See: https://www.eia.gov/dnav/pet/hist/LeafH ... K_MBBL&f=W

WTI is holding over $56/bbl for now. Traders will be focusing on the refined product inventories as a gauge of demand.