• Prior was -4553K
• Gasoline +5873K vs +2634K expected
• Distillates 1413K vs -850K expected
• Refinery utilization -0.3% vs -0.4% expected

Yesterday’s API data showed:

• Crude +1404K
• Gasoline +3463K
• Distillate -1179K
• Cushing -1496K

The ongoing builds in gasoline have been completely disregarded by the market. Some of that is seasonal but the past three weeks have added an average of nearly 8 million barrels per week, which is the highest on record.

• Despite omicron wave, oil demand rose in Q4 2021 by 1.1 mil bpd to 99 mil bpd
• But supply will soon overtake demand as some producers set to pump at or above all-time highs
• Steady rise in supply could see significant surplus in Q1 2022 and going forward
• US, Canada, Brazil set to pump at all-time highs for the year
• Russia and Saudi could also break their output records

The Bloomberg economist says:

• Our in-house model of a Fed reaction function — the Bloomberg Economics rule (“BE rule”) — suggests that a 50 basis-point rate hike at the March meeting is warranted, followed by another five 25 basis-point rate hikes the rest of the year.

Maybe 50bps is warranted, maybe it isn’t. The Fed is still doing QE on a massive scale. they will not hike by 50bps in March (IMO anyway).

“You want me what?”