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Oil Jumps After DOE Reports Bigger Than Expected Inventory Draws, 19th Weekly Production Cut

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Following last night's surprise build of 2.35mm barrels reported by API (against expectations of a 2.5mm draw), DOE reported inventory draws across the board. While the headline crude draw of 1.36mm barrels was below expectations of -2.5mm, it was considerably lower than API. Cushing saw a bigger than expected draw of 704k and both gasoline and distillates draws were bigger than expected. This is the seventh week in a row of Distillate draws. Crude production fell for the 19th week in a row to its lowest since Sept 2014.






  • Crude +2.35mm (-2.5mm exp)
  • Cushing -1.1mm (-500k exp)
  • Gasoline -1.48mm
  • Distillates -1.15mm




  • Crude -1.36mm (-2.5mm exp - range from -6.42mm to 0)
  • Cushing -704k (-500k exp)
  • Gasoline -1.49mm (-350k exp)
  • Distillates -1.25mm (1mm exp)


The 7th weekly distillate draw in a row and the entire complex saw inventory draws...






And production dropped for the 19th week in a row...






And crude spiked higher...






“Considering the rally we saw yesterday was related to hopes for a supply deal this is a bit of a slap in the face and we are seeing some weakness coming in,” says Saxo Bank head of commodity strategy Ole Hansen. “Comments from Draghi are also creating a bit of volatility in the euro/dollar that is also impacting oil prices”


“Oil has moved to the downside, but not broken any technical levels and is still in a tight range -- we are now waiting to see if the OPEC press conference or inventory data will change that”


“WTI focus is on $48, if we break below that we could see renewed weakness down to $45”




Charts: Bloomberg





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