Yesterday, WTI crude closed up $0.38 to $46.46/bbl, RBOB closed up $0.0115 to $1.4995/gal, and HO finished up $0.0223 to $1.4477/gal. Earlier today, the market was reflecting the API statistics report; both WTI and RBOB were trading down because the API reported builds in inventories and HO was trading slightly up because the APIs showed a small draw in inventories for distillates. The expectations for the API statistics this week were a draw in crude and builds in refined products.
Crude +2.8 million barrels
Gasoline +1.8 million barrels
Distillates -1.5 million barrels
OPEC’s production for May increased by 336,000 barrels per day. This was due to above-normal levels from Nigeria and Libya, as both countries are exempt from the cut. This is not new, but U.S. shale production continues to rise as well. The International Energy Agency (IEA) released an updated forecast for supply and demand for the end of 2017 and into 2018. The expectation for demand next year is 100 million barrels per day, the highest ever. However, the supply from non-OPEC is expected to grow by 1.5 million barrels per day, which will still outweigh the forecasted demand increase. All this news is still bearish for the market.
The DOE statistics released at 10:30 am E.T. sent the market plummeting. As of 11:30 am E.T., WTI is down $1.85/bbl, HO is down almost $0.04/gal, and RBOB is down $0.0650/gal. Even though the draw in crude seems bullish, the overall signs from the stats are bearish. Demand for refined products is weak and runs are at record highs.
Crude -1.7 million barrels
Gasoline +2.1 million barrels
Distillates +328,000 barrels