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US Production Slipped for the First Time Since October Print E-mail
ONG Focus | Insights | Written by Oil N' Gold | Fri Dec 29 17 00:13 ET

Crude oil prices rebounded on decline in US inventory and a surprising drop in US production. The front-month WTI contract added +0.34% while the Brent contract was up +0.42%. Gasoline and heating oil contracts also climbed higher despite inventory gains. Precious metal rose across the board as supported by weakness in US dollar and Treasury yields. The benchmark Comex gold and silver contracts gained +0.55% and +1.44% respectively. The focus of the commodity sector remained on base metals, in particular copper. The LME contract for 3-month delivery, extending the recent winning streak for a 12th day, jumping to a 4-yearhgih 7312.5 before settling at 7289. The strength is continued to be supported by improving demand outlook and expectations of Chinese production cut.

The US Energy Information Administration (EIA) shows that total crude oil and petroleum products stocks slumped -8.79 mmb to 1224.1 mmb in the week ended December 22. Crude oil inventory plunged -4.61 mmb to 431.88 mmb as stock declined in 4 out of 5 PADDs. PADD 3 inventory fell -5.64 mmb for the week whilst Cushing stock dropped -1.58 mmb to 51.41 mmb. Utilization rate added +1.6% to 95.7%. Meanwhile, crude production fell, for the first time since mid-October, by- 0.04M bpd to 9.75M bpd for the week. For refined oil products, gasoline inventory added +0.59 mmb to 228.37 mmb although demand added +0.63% to 9.49M bpd. Production gained +1.8% to 10.25M bpd while imports tumbled -20.33% to 0.39M bpd during the week. Distillate inventory increased +1.09 mmb to 129.94 mmb although demand jumped +10.19% to 4.33M bpd. Production gained +5.19% to 5.48M bpd while imports fell -37.1% to 0.24M bpd during the week.

On the dataflow, US Chicago PMI unexpectedly jumped to 67.6 in December from 63.9 a month ago. The market had forecast a drop to 62. Separately, initial jobless claims stayed unchanged at 245K in the week ended December 23. This came in higher than consensus of a fall to 241K. for the day ahead, the preliminary headline CPI for Germany probably eased to +1.5% y/y in December, from +1.8% in the prior month. The Eurozone's M3 money supply probably grew +4.9% y/y in November, down from +5% a month ago.

 

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