OPEC’s relatively high level of compliance on production cuts led the market higher yesterday. Crude finished yesterday’s session up $0.18 to settle at $52.81 while heating oil and RBOB also closed higher to settle at $1.6117 and $1.5256, respectively.
After yesterday’s settle the American Petroleum Institute released its weekly data, which showed builds across the board for crude, gas and distillates. Cushing, however reported a draw, which offset some of the pressure from the inventory builds. This morning, the Energy Information Association’s report reinforced the API data, showing U.S. crude stockpiles almost doubled expectations with a build of 6.5 million barrels. The EIA also showed crude stocks at Cushing dropping, which is more than countering the builds in refined products. After an initial drop-off from the morning prices, the market has gained ground and is now up across all three oil market indices. As was summed up by an oil broker from PVM, “The oil complex remains firmly stuck in its narrow range after the API reported an unrelenting increase in bulging U.S. petroleum stockpiles.” He went on to say, “Any hopes of a sustained recovery in price will depend on increasing efforts by OPEC to curb output though the prospect of an upside breakout will be undermined by the budding revival in U.S. crude production.”
As of this writing, crude, heating oil and gas are all up slightly as traders continue to digest the weekly supply data.