Are Crude and Products in a Stalemate?

By: Daniel Guttman / August 25, 2016

Let’s recap the EIA report from yesterday morning: There was a reported build in crude inventories of 2.5 million barrels, gasoline built slightly by 36,000 barrels, and diesel built 122,000 barrels. The key driver of the build was the U.S. east coast inventory, which grew by 3.1 million barrels. The market was down over a penny a good portion of the morning with the API report Tuesday evening showing stronger builds than the EIA report, but once the EIA was released the market evened out and eventually finished slightly down on diesel by $0.0055 and up $0.0100 on gas.

Today we are seeing a fairly flat market across the board. Gas is down $0.0123, diesel is even to the NYMEX, and crude is up $0.19 to $46.97 as of noon EST. With mainly bearish statistics released over the last two days, the question is: why isn’t the market falling off? There are a couple reasons why the market is remaining stagnant. First, in July Chinese data showed its crude inventories falling by 5.7% to 28.9 million mt (metric ton), reaching the lowest level since mid-2013. Second, refinery runs dropped by 1% last week due to a number of prolonged refinery issues in the Gulf Coast that led to utilization rates decreasing.

Interesting news:

  • South Korea to begin trading with Iran in euro from the end of August
  • Keep an eye on the possible onset of Hurricane Gaston on the Gulf Coast
  • Crude prices have flatlined since jumping up 20% from the beginning of August.0824set.png

Categories: Daily Market Update

Daniel Guttman

Written by

Daniel Guttman

With a background in wholesale and commercial sales as well as pipeline scheduling, Daniel is currently the Manager, Business Development in the Card Access Fuels department. He is tasked to find new and innovative solutions to increase sales opportunities for the sales team while managing and evaluating internal department processes. He assists with day to day personnel management, customer data analysis, as well as the daily Pacific Pride inventory and pricing direction.

Guttman Energy Daily Market Update Disclaimer – The information contained in this market update is derived from sources believed to be reliable; however this update could include technical inaccuracies or typographical errors and Guttman Energy does not guarantee the accuracy, completeness or reliability of this update. FURTHERMORE, THIS UPDATE IS PROVIDED "AS IS," WHERE IS, WITH ALL FAULTS AND WITHOUT ANY WARRANTY OR CONDITION OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY. GUTTMAN ENERGY ALSO SPECIFICALLY DISCLAIMS ALL EXPRESS AND IMPLIED WARRANTIES. YOU USE THIS UPDATE AT YOUR SOLE RISK. This update and any view or comment expressed herein are provided for informational purposes only and should not be interpreted in any way as recommendation or inducement to buy or sell products, commodity futures or options contracts.


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