Yesterday, WTI crude closed down $0.34 to $51.88, HO closed down $0.0110/gal to $1.8453, and RBOB finished down $0.0232/gal to $1.6988. The losses in yesterday’s session were a slight correction from Monday’s rally. WTI crude is holding above the key psychological level of $50/bbl and is thought to be headed towards $60/bbl by years end. It is important to note, the spread between WTI/Brent is the widest it has been in 2 years. WTI closed yesterday at $51.88/bbl and Brent closed at $58.44/bbl, over a $6/bbl spread.
Last night’s APIs were more on the bullish side with an unexpected draw in crude. The APIs showed a 761,000 barrel draw in crude inventories, signaling an uptick in refinery run rates since Hurricane Harvey. Distillates reported a draw of 4.5 million barrels, and gasoline had a build of 1.5 million barrels. This morning, gasoline lead the way into the red, while heating oil was relatively flat.
The DOE statistics released today showed a crude draw of 1.8 million barrels. Gasoline built 1.1 million barrels, and distillates, the largest difference from the APIs, only drew 814,000 barrels. Refinery utilization was up 5.4% in total. After the release of the Weekly Petroleum Status Report, the market reacted accordingly. WTI is current trading slightly higher, and both refined products are down. HO only is off $0.0075/gal and RBOB off over $0.04/gal. Also putting some pressure on the energy sector is the stronger U.S. dollar. The dollar rallied after the Fed’s hawkish announcement from Janet Yellen stating a rate hike later this year is expected.