The oil market finished mixed yesterday on the heels of the latest Energy Information Administration’s (EIA) inventory report. As a headline from Reuters stated, “U.S. oil inventories up unexpectedly.” Details of the report were as follows:
Oil prices finished lower yesterday across the majors in the energy sector after the government reported a surprise build in U.S. crude stockpiles. Yesterday’s session saw WTI crude oil down $0.87/bbl to close at $64.38/bbl. RBOB and HO also settled lower by $0.0019/gal and $0.0076/gal finishing at $2.0116/gal and $2.0148/gal respectively. The Energy Information Administration’s weekly stats are summarized as follows:
Oil markets finished lower yesterday as testimony from the new Chair of the Federal Reserve Jerome Powell pushed the U.S. dollar index higher in late day trading. Coupled with new data from the International Energy Agency released yesterday regarding U.S. production, all three indices closed solidly in the red. WTI crude closed down $0.90/bbl to close at $63.01/bbl while RBOB and HO also closed lower by $0.0233/gal and $0.0229/gal finishing at $1.8034/gal and $1.9630/gal respectively.
After opening the week yesterday with all three indices finishing down, the trend is continuing this morning as the board is lit red again for crude, RBOB and HO. Yesterday, crude finished down $0.0058 to close at $65.56 while RBOB and HO settled down by $0.0028 and $0.0312 to close at $1.9349 and $2.1048 respectively. Multiple factors contributed to yesterday’s decline including the strength of the U.S. dollar and most importantly, supply. Reports of rising U.S. production, increased rig counts and inventory expectations are all weighing heavily on the oil market. Later this afternoon, the American Petroleum Institute will publish their weekly stats followed by the Energy Information Administration’s all important report tomorrow morning.
As the oil market continues to digest, yesterday’s stats which showed a draw in crude and higher than anticipated builds in gasoline and distillates, we are seeing movement higher this morning based on the dollar index which is currently down approximately 0.50%. The downward dollar pressure can be attributed to the various conflicting news reports from China regarding slowing or halting the purchase of U.S. treasuries. While there seems to be little substance to those reports, the news was enough to move the dollar index.