Yesterday, WTI closed down $0.39/bbl to $48.49, RBOB closed down $0.0149/gal to $1.5213, and HO finished down $0.0125/gal to $1.5020. The API report released last night was very bearish and has been pushing prices lower last night into this morning. The API statistics showed a 1.1 million barrel build in crude inventories, which included a 664,000 barrel build in Cushing. OK. Gasoline and distillates showed builds as well, 2.2 million barrels and 3.7 million barrels respectively. Being that it is the summer driving season, the build in gasoline was the most bearish and surprising statistic.
However, the DOE statistics that were released at 10:30 a.m. ET today were very different from the APIs. The DOE statistics showed a draw in crude inventories of 933,000 barrels, but Cushing still showed a build of 904,000 barrels. There was a build in distillates but only 786,000 barrels, and gasoline had a large draw of 2.6 million barrels. Since the release of the DOEs the market has strengthened some but is still trading in the red. As of 11:30 a.m. ET, WTI is down $0.15/bbl, HO is down $0.0149/gal and RBOB is down $0.0079/gal.
Some other news that could be adding downward pressure to prices are as follows:
- The fears of a dollar rally if Britain leaves the European Union; the Brexit vote is next week on June 23rd
- Goldman Sachs claimed that “the oil price recovery has run out of steam”. They forecast crude needs to sustain a price of $45-$50/bbl to achieve a supply deficit in the second half of 2016
- The OPEC report indicated that the cartel expects no change in demand growth for its members and non-OPEC producers
- Reports of increased production in Iran and Russia