US DATA: Sharp build in crude stocks, key products decline - API
Quantum Commodity Intelligence – US crude oil stocks posted a sharp increase for the week ending 17 November, while key refined products were lower, according to a report released late Tuesday by the American Petroleum Institute.
The latest API numbers revealed a steep 9.05 million-barrel gain in crude inventories, significantly above expectations for a build of under 2 million/b. The key Cushing storage hub, the delivery point for the NYMEX WTI crude futures contract, added 640,000 barrels.
Gasoline stocks declined by 1.8 million barrels, while distillates dropped by 3.5 million barrels, the latter falling for a sixth consecutive week based on API data.
The weekly API report serves as a forerunner to the closely watched Energy Information Administration Weekly Petroleum Status Report, which will be published later Wednesday.
Last week's midweek oil selloff was largely triggered by the steep build in US crude stocks, with last Wednesday's delayed EIA report revealing US Crude inventories surging by 17.5 million/b during the two weeks to 10 November.
Meanwhile, the 3-2-1 crack spread, a measure of US refining profitability against gasoline and heating oil margins, was around $24.25/b based on Jan24 futures contracts early Wednesday, versus $23/b at the same stage last week when Dec23 contracts were still the front-line.
Separately, premiums for US Gulf crudes have rallied sharply following an oil leak from an underwater pipeline, which has disrupted production offshore Louisiana.
The impact is largely being felt on differentials for physical grades that are produced and piped to processing facilities in the eastern Gulf rather than WTI futures values. The WTI benchmark is settled basis Cushing, Oklahoma, and underpinned by crude deliveries from onshore fields.
