Yesterday, WTI crude closed down $1.14 to $50.82/bbl, RBOB closed down $0.0240 to $1.5467/gal, and HO finished down $0.0262 to $1.6114/gal. This was the second day of declines, due to a stronger dollar, concerns over OPEC compliance on the production cut deal, and news of production growth in Canada and the United States. The API statistics released last night were bearish so the downward trend was expected to continue today. However, that is not the case. Despite the reported builds across the board—crude built by 1.5 million barrels, gasoline built by 1.7 million barrels, and distillates built by 5.5 million barrels—the market is currently trading up. As of this morning, both HO and RBOB were up over two cents, and WTI was up around fifty cents. The market is up this morning because even though gasoline built, larger builds were expected. Another piece of news supporting prices is the news of Saudi Arabia reducing its crude supply to Asia in the upcoming month.
The DOE statistics released today reported even larger builds than the APIs. The DOE stats showed a build in crude inventories of 4.1 million barrels, mostly coming from PADD III. Gasoline showed a build of 5.0 million barrels, and distillates built 8.4 million barrels, with most of the distillate build also coming from PADD III. Right when the DOEs were released at 10:30 a.m. ET, the market came off big in response to the bearish statistics. However, as of 11:00 a.m., WTI is up over $1/bbl, and both refined products are up around $0.04/gal. There is not a lot of news to support the rally in oil prices. There is a rumor of a new import tax on gas and diesel. A higher tax would lower imports, resulting in less product to help with supply/demand, which props prices up.