Energy Traders Question Insider Leaks In American Petroleum Institute (API) Data

Yesterday API report caused widespread confusion and misreporting of the data by many news sources
Natural Gas futures, it is all about the weather
Saudi Aramco aims to announce the start of its initial public offering (IPO) on Nov. 3
The Energy Report

The Energy Report


The Phil Flynn Energy Report 10-30-2019

API Leaks


Congressman Adam Schiff may or may not be behind the leaks of American Petroleum Institute (API) data. If he is not, I wish he was, because he has experience with this sort of thing. The API is an industry group that collects data on supply voluntarily by its members and releases that information each week, normally at 3:30p central time. In the old days, the report was released to the press immediately, but in recent years the numbers are now only released to their subscribers and the bulk of the trading community relies on leaks to get and share the information. Where is the professional leaker Congressman Schiff when you need him? I guess no one knows what goes on behind closed doors.


The leak system works pretty well assuming the leaker or leakers have the right information. Yesterday, after the API came out, it seems that the leakers leaked some of the wrong data in error. It caused widespread confusion and misreporting of the data by many news sources that have come to rely on these leaks. At one point there seemed to be three sets of API numbers making their way around the internet.


The numbers that we know were widely believed to be correct should have been very bullish. The report that most think was the most accurate shows a  bigger than expected crude oil draw of 1.7 million barrels. That came despite a 1.2 million-barrel Cushing, Oklahoma crude oil build. Gasoline supply plunged by a gas pump shaking 4.7 million barrels and distillates by 1.6 million barrels. Yet the confusion on the data has most traders awaiting today's so-called official Energy Information Administration (EIA) supply report before getting too excited. The two reports have varied widely and the EIA will be the deciding factor.


At least until the Fed makes its decision today. The Fed is widely believed to be cutting interest rates by a quarter-point yet the Fed Chairman’s Jerome Powell’s press conference may determine where the markets go from here. The Fed has to balance mixed economic data against a stock market at record highs along with trade uncertainty from China. The cut will be easy. It is what comes next that might not be.  


Get aboard the Trump Freedom Gas Train. While the far left continues to push new green energy deals that are unrealistic and absurdly expensive, the Trump administration is doing more to reduce greenhouse gas emissions than any of them. The Trump administration gets it that the fastest and most efficient way to reduce greenhouse gas emissions is to get the world away from coal and on to natural gas. Nuclear power might be another way but the world is too afraid of it. President Trump realizes that LNG is the fuel that is the most cost-effective and economical way to reduce emissions and at the same time does not restrict human freedoms to get there. He also realizes that he who controls LNG may control the global economy in this century.


It helps of course that there is a huge economic benefit to the U.S. In its latest move to make the U.S. LNG provider to the world, the Trump administration is planning to loosen restrictions on transporting LNG in an effort to further boost the nation’s energy sector according to the Houston Chronicle. “The Department of Transportation has proposed allowing railroads to begin transporting LNG in cryogenic tanker cars, which can maintain temperatures of less than minus 300 degrees and are currently used to move chemicals like ammonia and ethylene. A final decision is expected early next year.” The Houston Chronicle says that “the railroad could offer an enticing alternative to natural gas customers when pipeline projects are under increasing scrutiny over natural gas’s contribution to climate change, with New York Governor Andrew Cuomo blocking construction of new pipelines running through his state and into New England. At the same time the rush to develop oil fields in West Texas - far from the nation’s pipeline network - has resulted in many drillers flaring the natural gas that is a byproduct of crude production.”


Yet in the short term for natural gas, it is all about the weather. Short sellers are caught as once again mother nature has the final say. The early cold blast was forecast very early by Bret Walts BAMWX Meteorologist. With natural gas supply back above the five -year average yet winter coming early, it is very important to keep up with the weather swings. To that point, BAMWX is having a free winter outlook webinar at 11 AM EDT today. If you want to see it and hear it join at They will release their official winter forecast (including the winter heating demand outlook) and talk about all the forecast risks, pattern drivers and of course snow for 2019-2020. SNOW? NOOOOOO!

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About the Author

Senior energy analyst at The PRICE Futures Group and a Fox Business Network contributor.