FAST FIVE: WTI Extends Losses After Big Product Inventory Builds
API Crude -4.8mm (-2.20mm exp) Cushing -1.40mm Gasoline -400k Distillates +1.1mm DOE Crude -3.69mm (-2.20mm exp) Cushing -887k Gasoline +3.058mm – biggest build since July Distillates +1.718mm – biggest build since September While the crude draw was bigger than expected (and smaller than API), the surge in product stocks is perhaps more worrisome from a demand perspective.
Inflows from Iraq were also up, recouping most of the previous week's loss and pushing total imports from the Middle East back above 1 million barrels a day.
Source: Bloomberg WTI was sliding to around $77.50 ahead of the official data and dropped to a $76 handle after the big product builds.
The demand pressure may not last, as supply issues will likely be the greater factor in 2023.
Shale growth continues to underwhelm, while Latin American, Russian and OPEC+ output may disappoint in the coming year.