WTI/RBOB Extend Losses After Huge Crude Build

WTI/RBOB prices tumbled today on demand outlook cuts (and late comments from Brazil and Russia with regard OPEC cuts) ahead of tonight’s API report which is expected to show crude and gasoline draws. However, WTI/RBOB prices extended their losses as Crude (biggest in 9 months) and Gasoline saw significant builds.

API

Crude+6.513mm (-2.4mm exp) – biggest build in 9 months
Cushing -1.803mm – biggets draw in 4 months
Gasoline +2.399mm (-1.5mm exp) – biggest build in 3 months
Distillates -2.527

Last week’s surprise Crude build appear to be a trend…

Following OPEC’s forecast of huge oil demand, IEA poured cold water all over that and cut its demand outlook, then Brazil and Russia seem to back away from extending OPEC production cuts…

Petrobras CEO Pedro Parente says his first responsibility is to investors:

“I can’t play games with the size of the debt I have,” Parente says when asked if Brazil’s state-run producer would ever consider such an action.

“How would I defend that to my investors?”

Says Brazil’s government doesn’t have the power to impose production limits on companies operating in the country, including Petrobras.

“I have a huge debt to pay, I have to produce oil, I have to make money”

and Bloomberg reports, OPEC has yet to convince Russia that it’s necessary to reach an agreement to extend oil-output cuts at a Vienna meeting later this month, as officials and oil bosses in Moscow still haven’t decided how long the output deal should last. The world’s largest energy exporter still believes it’s too early to announce anything this month, two people with knowledge of matter said. Another issue is a duration of the extension, with options including an additional three months of cuts being considered.

All of which weighed on prices heading into the API data and they extended losses as the data hit…

“Global demand growth, with the extension of the production cut, were the two primary factors behind the significant increase we’ve seen, particularly in the last six months,” Gene McGillian, a market research manager at Tradition Energy, says. The dour growth forecast is “taking a little bit of the bloom off the rose”

…read more

Source:: Zerohedge.com

      

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