Yesterday, WTI closed down $0.68 to $47.72/bbl, HO closed down $0.0087 to $1.4919/gal, and RBOB finished up $0.0028 to $1.5835/gal. The market was relatively flat yesterday ahead of the Federal Reserve announcement and DOE statistics due out today. However, after the settle yesterday the market was up two cents because of the bullish API statistics. The API statistics showed an unexpected draw in crude inventories of 531,000 barrels. Both refined products showed a draw of about 4 million barrels. The only bearish stat was the 2.1 million barrel build in Cushing, OK.
The DOE statistics just about mirrored the APIs this week. The DOE stats showed a 237,000 barrel draw in crude inventories. Distillate had a draw of 4.2 million barrels and gasoline had a slight smaller draw of 3.1 million barrels. Cushing did have the 2.1 million barrel build.
The market continues to trade upward across the board this morning, influenced by the APIs and DOEs, despite numerous pieces of bearish news. The first is the ongoing talks surrounding global oversupply. The OPEC/non-OPEC agreement should be helping but the assessment for the month of February shows Saudi Arabia had an 180,000 barrel/day increase and that Russia is only at 40% compliance by cutting 119,000 barrels/day instead of the agreed upon 300,000 barrels/day. Also bearish is the continuing increase in U.S. drilling rigs; even if OPEC was at 100% compliance, increased U.S. production would be offsetting that cut. The last piece of bearish news is the Federal Reserve announcement this afternoon at 2 p.m. ET regarding an interest rate increase. If there is an increase, it will strengthen the U.S. dollar, which is bearish for oil prices.
As of 11:15 a.m. ET, WTI is up $0.90/bbl, HO is up almost $0.02/gal, and RBOB is flat.