Yesterday, WTI crude closed up $0.11 to $52.23/bbl, HO closed down $0.0002 to $1.6688/gal, and RBOB finished up $0.0297 to $1.5936/gal. After the release of the API statistics last night, oil prices were trading up. The API statistics showed draws across the board; crude drew 4.1 million barrels, gasoline 2 million barrels, and distillates 1.6 million barrels. However, this morning the market is pretty flat, so it does not seem like the market believes these statistics.
Russia’s expected 2016 oil output is at 11 million barrels per day, which is an increase of 2.5 percent from 2015. This makes you question the effectiveness of the agreement among OPEC and non-OPEC producers to cut production. Another piece of news that came out yesterday was around the reopening of a pipeline in Libya’s oil field that has been closed since 2014. This action will restart Libya’s biggest oil fields, El Sharara and El Feel, which together produce 400,000 barrels per day. With Libya being exempt from the cut, these barrels will just take away from OPEC’s effort to reduce production.
The DOE statistics released today at 10:30 a.m. ET showed a build in crude of 2.3 million barrels. Both refined products still showed a draw in inventories. Gasoline drew 1.3 million barrels and distillates drew 2.4 million barrels, mostly coming from PADD I. Initially, HO was down about a penny, and RBOB was up about a penny at the release of the DOE statistics, but as of 1:00 p.m. ET HO is down about two cents and RBOB is up only 35 points.