US Crude Stocks Plummet, claims EIA Data
It's not all rosy for the US crude stocks at the Cushing oil hub, the delivery point for US crude futures. For the first time since November, the US crude supplies nose-dived in what is being seen as an unhealthy development, said data released by the Energy Information Administration (EIA), this Wednesday.
In the week ended on April 24, the crude inventories in the Cushing, Oklahoma oil center ascended only by 1.9 million barrels as opposed to the analysts' expectations of 2.3 million barrels. Notwithstanding the above factors, what is interesting is the price movement visible in the overall crude as well as refined products markets.
Gene McGillian, senior analyst at Tradition Energy in Stamford, Connecticut too affirms, "The under 2 million-barrel build is less than half of what the API had prepped the market for, so not surprisingly we're getting higher price action here".
Nevertheless, Brent June crude having attained a 2015 peak of $65.93, settled at $65.70, up $1.06 from the previous close. However, Distillate stockpiles, which include diesel and heating oil, expected to rise by 1.2 million barrels, knocked down by 66,000 barrels.
Gasoline stocks grew by 1.7 million barrels, far exceeding the analysts' expectations of a 217,000-barrel gain.
The East Coast region, the delivery point for US refined products futures contracts, on the other hand, performed better than expected. Utilization in this region attained its zenith, seeing a rise of 3.9 percentage points to close at
90.9%. This rise is the highest since 2010, the year since which data was first made available by the EIA.
According to McGillian, the market seems to be adjusting smartly. It is overlooking production gains and reacting to draws and smaller builds. Therefore, what is expected of the wavering stocks is to be perceptive and grasp this very market sentiment.