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April 21, 2015

API Data Show More Inventory Build In U.S. Crude, Gasoline And Distillate

By EconMatters

This evening, MarketWatch gave an update that the American Petroleum Institute (API) data  released late Tuesday (for the week ended April 17) showed U.S. crude supplies climbed 5.5 million barrels, more than double the 2.6 million-barrel increase forecast by analysts surveyed by Platts.  API also reported that gasoline stockpiles rose 1.1 million barrels, while distillate inventories climbed 1.7 million barrels.

The API data is typically a prelude to the more closely watched Energy Information Administration (EIA) report due Wednesday. MarketWatch also reported that following the API data, June crude CLM5 traded down to $56.37 a barrel in electronic trading at around 8:10pm EDT, from the $56.61 close on Nymex.  
Chart Source: EIA, April 15, 2015

U.S. crude oil glut has filled storage capacity almost to the brim (see EIA chart above)at an unprecedented level.  On top of the 5.5 million barrels increase in crude oil, the inventory build in gasoline and distillate as reported by the API data and the not so optimistic March jobs report suggests some undercurrent in the real U.S. consumer and business sectors (We are not talking about the "evil 1%" or the juiced-up stock market by Fed's infinite QE and stock buybacks.)

Last Wednesday, WTI spiked almost 5% in one day because EIA reported a 'less-than-expected' oil inventory build.  Now that Saudi Arabia has ended its air bombing campaign in Yemen, it will be interesting to see how oil market reacts if the EIA data tomorrow comes in with a similarly bearish report.

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