Yesterday, WTI closed down $0.97 to $43.23/bbl, HO closed down $0.0162 to $1.3949/gal, and RBOB finished down $0.0266 to $1.4240/gal. The market has been relatively flat since the release of the mixed API statistics last night. Crude inventories drew 2.7 million barrels, 1.3 million coming from Cushing, OK. Imports were down 978,000 bpd. Refined products were bearish; gasoline had a small build of 346,000 barrels, and distillates built by 1.8 million barrels.
The DOE statistics were fairly similar to the API report. Crude inventories drew 2.5 million barrels, 1.1 million coming from Cushing. Gasoline differed: instead of a build, inventories actually drew 578,000 barrels. Lastly, distillates built 1.1 million barrels, still the most bearish statistic of the report.
The OPEC/non-OPEC committee had a meeting yesterday to go over May compliance numbers. OPEC compliance was at 108% and non-OPEC was at 100%.These numbers are very bullish, and if it wasn’t for the continued increase in U.S. production, oil prices would most likely be higher.
Another important thing to keep in mind is that it is hurricane season. Tropical Storm Cindy is expected to hit the Gulf Coast over the next three days. See image below:
The rain and wind could be an issue for the refinery complex in the Gulf. The following image shows all the refineries in the Gulf Coast, and Tropical Storm Cindy is headed straight there. The Gulf Coast cash market could likely strengthen during this time.