Yesterday, the market closed up across the board; WTI up $0.64 to $48.37/bbl, HO up $0.0142 to $1.5167/gal, and RBOB finished up $0.0160 to $1.6349/gal. The market continues to trade up this morning due to the reasons listed as follows:
- The API statistics that were released last night. Crude inventories actually had a bigger than expected build of 1.9 million barrels, but the draws in refined products and Cushing are driving the market. The APIs showed gasoline inventories drew 1.1 million barrels, and distillates 2 million barrels. Cushing showed a draw of 575,000.
- A pipeline is shutdown to Libya’s largest oilfields, so force majeure was declared and production is reduced by 250,000 barrels per day.
- Iran’s Oil Minister commented that OPEC/non-OPEC will more than likely continue production cuts, but a meeting to discuss will happen soon.
- Britain is making Brexit official today; British Prime Minister Theresa May formally notified the European Union of Britain’s plan to withdraw after the vote in June 2016. Now the two year negotiations and all the uncertainty surrounding this will begin.
Another piece of news anticipated today was the DOE statistics that were released at 10:30 a.m. ET. The DOEs were even more bullish than the API statistics. The DOE statistics showed a build of 867,000 barrels in crude inventories, and Cushing showed a draw of 220,000 barrels. The refined products’ stats were bullish, both products showed a larger draw than reported in the API stats. Gasoline drew 3.7 million barrels, and distillates drew 2.5 million barrels. The demand is very strong for both gasoline and distillates, up 6% and 13% respectively. After the release of the DOEs, the market rallied even further. As of 11:50 a.m. ET, WTI is up about $1/bbl, HO is up around $.0260/gal, and RBOB is up $0.0380/gal.