Yesterday the U.S. Government reported that net commercial crude oil stocks fell by 4.8 MMbbls or 1½%. For a second straight week the bulk of the decline occurred along the Gulf and West (coasts. Conversely, we saw another huge build in the Midwest, inclusive of the NYMEX hub.
Furthermore, overall supplies in the Midwest rose to a record 89.7 MMbbls and at the NYMEX complex in Cushing, OK, supplies rose to within 0.6% of the record highs from last February. In other words, you can’t swing a cat without hitting a barrel of oil at the delivery point of the NYMEX contract, yet, said NYMEX contract rallied 3.1% upon receipt of this news.
Supplies of No.2 oil dropped by a heavy 3.03 MMbbls (-1.8%) to 161.3 MMbbls. The bulk of the draw accrued on the heating oil side of the ledger, particularly in East. We also saw a relatively large draw for diesel fuels on increased holiday intermodal traffic.