WTI/RBOB held on to gains after last night’s surprise crude draw from API, but quickly tumbled after DOE reported a 1.9mm crude build (2nd week in a row) and significant gasoline and distillate builds. However, US crude production’s massive spike to 10.25m b/d was the big headline.

API

• Crude -1.05mm (+3.15mm exp)
• Cushing -633k
• Gasoline -227k
• Distillates +4.552m

DOE

• Crude +1.895mm (+3.15mm exp)
• Cushing -711k (-263k exp)
• Gasoline +3.414mm (+500k exp)
• Distillates +3.926mm (-1.25mm exp)

Last week’s surprise (huge) crude build from DOE was dismissed by API overnight but DOE ruined that party and showed the second weekly crude build in a row. Gasoline and Distillates stocks resumed their rise…

As Bloomberg’s David Marino notes, Total U.S. inventories grew the most since early September. It’s actually even a bigger deal than the headline number suggests: if not for a 6.4 million draw from propane/propylene and “other” oils, we’d be looking at a 10 million barrel build.

But all eyes were once again on US crude production as it smashed above 10m b/d.

As Bloomberg’s Julian Lee notes, that huge jump in crude production is not the result of a sudden burst of drilling. More likely it is the correction we expected after the earlier release of monthly data for November that showed production was already above 10 million barrels a day three months ago.

U.S. crude output hits a record high of 10.25 million bpd, surpassing both the monthly high set in Nov 1970, and Saudi Arabia’s latest production.

 

The reaction in WTI/RBOB was swift…