Bearish Signs Ahead

By: Angela Agostinone / June 14, 2017

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.    

API statistics:

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.

 DOE statistics:

Crude -1.7 million barrels

Gasoline +2.1 million barrels

Distillates +328,000 barrels

 

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Categories: Daily Market Update


Angela Agostinone

Written by

Angela Agostinone

Angela manages daily price changes from suppliers to ensure Guttman Energy customers are getting the most current and competitive rack prices. She is also responsible for relaying supplier product allocations to Guttman Energy's sales and logistics team, as well as analyzing specific benchmarks such as OPIS, Platts, and Argus to ensure each customer is getting the greatest value from their contracted fuel purchases.


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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