- 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.
It was an ugly finish for US stocks as heavy selling hit in the final half hour of trade to extend the decline in the S&P 500 to 1%.
- S&P 500 -45 points to 4532
- Nasdaq Comp -1.1% (now down 10.7% from the Nov 19 high)
- Russell 2000 -1.2%
- DJIA -1.0%
The S&P 500 closed right at the December 20 low:
- 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).