Over in the US, the main story has been the recent decline in crude following a EIA report prior session. The report indicated a +2.276m build in stockpiles with a modest gasoline and build in distillates. Price action of both and EIA reports coupled with unfavorable supply comments from OPEC has sent WTI spiraling in recent sessions from the 48 handle to now probing in the 44 level. DOE Inventory plus crude product inventory soars above 1.4 Billion barrels for the first time ever. This is 40% above the 25-year normal average. Insiders at Shell and ConocoPhillips management teams now stress a 2017 rebalance. The truth emerges that the EIA lied about “overestimated” crude and gasoline demand in the 1h16 by 16%. On watch is China’s SPR with reports of full or near capacity. JPM estimates that China’s SPR demand was near 1mm bpd. This could spell a global demand decline in the near term that would be detrimental to crude’s price. Forex concerns still remain as dollar strengthens and CAD/USD continues it’s tumble.
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