The EIA’s Weekly Petroleum Status Report was released yesterday. There was a draw of 2.1 million bbls on crude inventories. The EIA stated that for refined products, gasoline built by 2.8 million bbls and distillate built by 3.1 million bbls. Crude stocks at Cushing drew by 1.9 Mb to 54.5 Mb, and total US crude stocks continued to stay far above 5 year highs.
The futures market for crude and the refined products have made a move lower this morning, as the market is now awaiting the Federal Reserve's decision on interest rates, due out later this afternoon. If the FED decides to raise interest rates it would be the first rate hike since the 2008 economic crisis. According to PVM, “A rate hike is viewed as bearish for futures because it increases the cost of borrowing and is often used as a monetary tool to slow down the pace of economic growth.” The IMF and World Bank both say they will be reducing their global growth forecasts for this year in their next reports. The OECD led the pack by doing it yesterday with a small cut from 3.1 to 3% for global growth with China at 6.7%, the US at 2.4% and Europe at only 1.6%.
In cash market news we continue to see increased prices in the Chicago market, due to a multitude of factors including ongoing refinery issues and the looming “turnaround season”. Gulf Coast CBOB and RBOB prices both closed Wednesday 25 cents weaker than cash values for CBOB nd RBOB in Chicago.