The EIA’s Weekly Petroleum Status Report was released yesterday. There was a build of 8 million barrels on crude inventories. The EIA stated that for refined products, gasoline drew by 1.5 million barrels and distillate drew by 2.6 million barrels. The refined product draws were expected due to scheduled refinery turnarounds. However, refineries showed their first throughput increase in the last five weeks, signaling the end of the turnaround season.
This morning the market seems to be rebounding slightly from the plunge it took yesterday after the release of the EIA data. This rebound is also supported by increased refinery demand as refineries go back online. Furthermore the RBOB futures contracts have held above support levels and have regained movement over the 5 day moving average and HO contracts have also remained above the 5 day moving average support levels. PVM’s technical analysts claim that the RBOB futures contract will be the leading indicator of today’s movement.
Another week goes by with increased domestic and global crude inventories. There are 99 million more barrels of crude supplies than there were at this time last year. These increases are noteworthy due to the fact that domestically, crude production is 250,000 barrel per day below last year’s numbers. Internationally, OPEC crude exporting countries are producing more than in previous years and Iran’s VP has made claims that they can double their oil exports to 2 million barrels per day within months of the repeal of their sanctions. The $50 per barrel WTI number seems a bit out of reach with current prices around $45/barrel. As the market switches to the next month’s futures contract it will be interesting to note the direction of WTI prices.