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WTI Crude Plunges To $34 Handle After Record Gasoline Inventory Build
WTI Crude Plunges To $34 Handle After Record Gasoline Inventory Build
DOE conmfirms API’s reported large draw but Cushing continues to build for the 9th week in a row…
But…
- *GASOLINE INVENTORIES ROSE 4.78%, EIA SAYS
- *DISTILLATE INVENTORIES ROSE 4.12%, EIA SAYS
A record build in gasoline stocks!!
The build in distillates means that primary product may be gettiung shipped away but there is no demand. So exporting oil from US helps with overall inventory decline, but massive build of gas, distillate shows clear production surplus
And even more worrisome, Domestic Supply in lower 48 up 20,000 boe/d and HIGHER than a year ago.
Crude jumped on the API news but gave it all up as growth fears rose overnight…
As we continue to remind traders – December ALWAYS see notably drawdowns as firms lighten up inventories on their balance sheet ahead of year-end to reduce tax burdens…
And judging from history, as Bloomberg notes, it should resume as soon as the festive season is over: Stocks have built by 3.2 million barrels on average in January since 1921.
Charts: Bloomberg
Sucking Spoilt Milk From A Bloated Dead Sow
Sucking Spoilt Milk From A Bloated Dead Sow
With US GDP growth ‘officially’ back where it belongs, in the Arctic zone close to freezing on the surface but much worse in real life, for reasons both Albert Edwards and Ambrose Evans-Pritchard (not exactly a pair of Siamese twins) remarked this week; that is, excluding the “biggest inventory build in history, the economy contracted sharply”, it’s time for everyone to at long last change the angle from which they view the world, if not the color of their glasses.
But ‘everyone’ will resist, refuse and refute that change, leaving precious few people with an accurate picture of the – economic – world. Still, for you it’s beneficial to acknowledge that very little of what you read holds much, if any, truth or value. This is true when it comes to politics, geopolitics and economics. That is, the US is not a democracy, it is not the supreme leader of the world, and the American economy is not in recovery.
Declining business investment, a record inventory build and extreme borrowing to hold share prices above water through buybacks, it all together paints a picture of a very unhealthy if not outright dying economy, and certainly not one in which anything at all is recovering. But how are you supposed to know?
The entire financial media should change its angle of view, away from the recovery meme (or myth), but the media won’t because the absurd one-dimensional focus on that perpetuated myth is the only thing that makes the present mess somewhat bearable, palatable and, more importantly, marketable, to the general public.
…click on the above link to read the rest of the article…
A New Red Flag for Our Rosy Economic Scenario
A New Red Flag for Our Rosy Economic Scenario
Wholesale inventories balloon to Lehman-Moment levels.
A lot of economists, particularly those quoted in the media, claim that rising inventories are a sign of confidence, that merchants believe that the future is rosy, that sales will be good. There is some truth to that. Merchants stock up for expected good times. But when these hopes of good times turn into sales that are less than rosy, these inventories begin to pile up, and the ratio of inventories to sales suddenly takes a nasty turn.
Inventories tie up precious working capital, so companies manage them aggressively. But in the US, wholesale inventories have been ballooning since summer. And they now have become a red flag for the economy.
Part of the problem: hopes meet crummy sales. December sales by merchant wholesalers (except manufacturers), adjusted seasonally but not for price changes, fell 0.4% from November to $449.8 billion, the Census Bureau reported today. Year-over-year, they rose a mere 1.4%!
The good part: sales of durable goods jumped 7.3% from a year ago, with a number of big gainers, including electrical equipment up 13.4% and metals up 14.3%. But non-durable goods sales dropped 3.5% from a year ago. Wholesales of petroleum products, including gasoline, plunged 13.7% for the month and 29.4% from a year ago.
…click on the above link to read the rest of the article…
