The set of API numbers were not exactly inspiring, and the catching number is the big build in distillate stocks, with falling implied demand. Middle distillate cracks reacted and lost around $0.50/bbl overnight. However, SFOT is aware there has been a lot of consumers stopping into this rally the past few days, and distillate cracks remain well off their lows. SFOT is happy to sit on this short position, but he is a little undecided as to what he would like to do for RBOB at this moment. The API numbers does not provide a strong colour and he shall await the DOE to decide. Another thing to note about the API number is that refinery run rates are still low (spike down in chart due hurricane last yr). With low runs, increasing inventories in middle distillate can only signal a doomed complex economically for the forseeable future. Run cuts also confirmed SFOT's believe that crude spreads should be weaker and he is also happy to sit on his short position initiated a few days back.
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