DOE Reality Douses API-Fueled Rally

By: Greg Gill / February 18, 2016

Leaders from Venezuela, Qatar and Iraq met with Iranian oil Minister Bijan Zanganeh yesterday with the hopes of convincing him to join in on the proposed mass production freeze. Although no formal plan was announced, Zanganeh did state that Iran would continue to welcome dialogue with other nations regarding the proposed production freeze.

Currently, there is a lot of misleading news suggesting that Iran definitely wants to and will freeze production. When you dig into the actual facts and statements made, you find that Iran and Iraq have both said essentially that they support anything that will raise prices and they would gladly sell crude at the higher prices – BUT – they have no intention of freezing production at their January levels at this moment in time.  Remember that Iran is just beginning to ramp up their production after long term sanctions were recently lifted, so they are nowhere near their pre-sanction levels.

Low oil prices are taking a heavy toll on the economies of countries that rely heavily on revenue from oil exports, such as Venezuela. Venezuela’s economy is in a deep recession, causing the government to raise their subsidized gasoline prices for the first time in 20 years.

The API stocks report, released yesterday, showed a draw in crude oil stocks of -3.3 mill bbls and a draw in distillate stocks of -2.0 mill bbls. Coupling yesterday’s news about Iran with the API stocks report made for quite the rally yesterday and early this morning. However, this rally was short-lived as the DOE stats released today showed that inventories actually increased, with crude building by 2.1 million barrels, gasoline up 3.0 million, and distillates up by 1.4 million. As of 11:50 am ET, crude is flat, gasoline is down a couple cents and heating oil is down just under a penny.


Categories: Daily Market Update

Greg Gill

Written by

Greg Gill

I’m passionate about fully understanding my customers’ fuel operations and the fuel markets in which they operate. I want them to view me as their fuel expert. To develop strong, trusting partnerships with customers, I have to provide them with meaningful and timely information to ease the challenges of making smart fuel decisions, allowing them to focus on their core business.

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.


Subscribe to our blog

Price Feed

Stay up-to-date on current fuel prices and market trends with our NYMEX price feed (15 minute delay to the live market).

© 2018 Market data provided and hosted by Barchart Market Data Solutions. Fundamental company data provided by Morningstar and Zacks Investment Research. Information is provided 'as-is' and solely for informational purposes, not for trading purposes or advice, and is delayed. To see all exchange delays and terms of use please see disclaimer.


Contact Us