Yesterday, WTI crude closed up $0.65/bbl to $34.40, HO closed up $0.0058/gal to $1.0995, and RBOB finished down $0.0172/gal to $1.3035. The API data report released yesterday showed a large build in crude inventories of 9.9 million barrels. Distillates had a 2.7 million barrel build, 1.8 million barrels of which is in Cushing, OK. Lastly, the APIs showed a draw of 2.2 million barrels in gasoline inventories. This morning WTI crude has been trading down, but both refined products have been mixed. They started trading down after the bearish API reports but currently both are up between $0.0050 and $0.0150. The strength could be a result of Russian oil output being unchanged in February from January, which could be viewed as an indication the country is supporting the oil production freeze.
These gains suggest strength in the short term, but fundamentally the market is still very bearish. For prices to continue to increase, contracts need to go through key resistance levels:
HO: 1.1181, then 1.1252 (Dec 2008 low)
RBOB: 1.3377, then 1.3415
The DOE statistics, released this morning at 10:30 a.m. ET confirmed the API numbers:
Crude +10.4 million barrels
PADD 1: +931,000 barrels, PADD 2: -1.9 million barrels, PADD 3: +8.8 million barrels
These are the highest inventory levels since 2004.
Distillates: +2.9 million barrels
PADD 1: +262,000 barrels, PADD 2: +1.3 million barrels, PADD 3: +1.2 million barrels
Gasoline: -1.5 million barrels
PADD 1: -1.4 million barrels, PADD 2: -33,000 barrels, PADD 3: +987,000 barrels
When the stats were first released the market came off, but currently both refined products are up over two cents and WTI is now up 44 cents and broke through the $34.82 resistance level.