Oil prices hit the new high of 2016 yesterday; WTI closed up $1.40/bbl to $44.04, HO closed up $0.0422/gal to $1.3325, and RBOB finished up $0.0529/gal to $1.5660. Prices continue to rise today with HO trading up over three cents, and RBOB is up almost two cents. Supporting the rally are the weaker U.S. dollar and the API statistics that were released last night. The API reported a draw in crude inventories of 1.1 million barrels vs. expectations of a 2.4 million barrel build. Both refined products drew as well, with gasoline down 400,000 barrels and distillates down 1.0 million barrels. However, there was a build of 1.9 million barrels of crude in Cushing, OK.
The Federal Reserve’s announcement is due out today at 2 p.m. ET after the two day FOMC meeting Tuesday and today. The lower U.S. dollar yesterday was driven by weaker-than-expected U.S. economic data. Analysts believe the weak data cut the likelihood of the Fed raising interest rates this year, but especially in June.
The DOE statistics released at 10:30 a.m. ET have the market coming off. The DOE reported a 2.0 million barrel build in crude inventories, with a build of 1.7 million barrels in Cushing. Gasoline had a build of 1.6 million barrels, and distillates had a draw of 1.7 million barrels. As of 11:15 a.m. ET, HO is up just under two cents and RBOB is now down almost a penny.
The resistance levels for today are: WTI 44.22, HO 1.3217 and RBOB 1.5782. The most important contract to watch is RBOB; if it finishes above 1.5782, prices can be expected to move higher.