Is the Market Heading Back to February Values?

By: Daniel Guttman / March 29, 2016

The crude rally which took over most of March appears to be correcting itself back to fundamental supply and demand reality. This morning, the market is trading down about three cents on both Heating Oil and RBOB, reflecting expectation of further crude inventory builds in the U.S. Reuters surveys predict that crude oil inventories rose by 3.2 million barrels last week. With record inventory and rising stocks, talk about the production freeze meeting scheduled for April 17, and doubts about whether or not the meeting will take place or an agreement will be met, there is not enough sentiment to justify the latest rally.

With minor global news, the market is awaiting the API’s weekly supply estimates at 4:30 p.m. and the EIA data to be released tomorrow at 10:30 a.m. Market observers expect an overall drop in refined products inventories, but an increase in U.S. distillate stocks is likely.

Yesterday, WTI finished down $0.07 to $39.39/bbl. HO finished down $0.0178/gal to $1.1801. There was not much movement on RBOB yesterday, finishing up $0.0021/gal to $1.4680. Outright gasoline prices jumped up between +0.0500 and +0.1000 in some New York Harbor influenced markets as suppliers move to switch their gasoline inventories to the more expensive summer-grade blends.

In separate news, Kuwait and Saudi Arabia have agreed to slowly resume production at the joint-owned, 280,000 bpd Khafji Oilfield which could also put pressure on oil. In October 2014 the oilfield was shut down due to environmental reasons. 

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Categories: Daily Market Update


Daniel Guttman

Written by

Daniel Guttman

With a background in wholesale and commercial sales as well as pipeline scheduling, Daniel is currently the Manager, Business Development in the Card Access Fuels department. He is tasked to find new and innovative solutions to increase sales opportunities for the sales team while managing and evaluating internal department processes. He assists with day to day personnel management, customer data analysis, as well as the daily Pacific Pride inventory and pricing direction.


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.


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