Yesterday, WTI closed up $0.14 to $43.44/bbl, HO closed up $0.0106 to $1.4050/gal, and RBOB finished down $0.0562 to $1.3646/gal. The weakness in RBOB yesterday was a result of the announcement from Colonial Pipeline that the bypass line work on Line 1 was completed and expected to restart sometime today. Oil prices were moving higher Wednesday morning after the bullish API statistics were released last night.
The API statistics showed a surprising draw in crude inventories of 7.5 million barrels. This is what is driving the market upward this morning. Cushing, OK had a small build of 400,000 barrels. Refined products were mixed; gasoline had a draw of 2.5 million barrels, and distillates had a build of 1.4 million barrels.
In addition, there were reports of a strike in Norway of more than 300 oil workers. Depending if the strike will last, it could threaten output in the North Sea.
The DOE statistics followed the bullish API report. The DOE statistics showed a draw in crude inventories of 6.2 million barrels, with more than half coming from PADD III at a 3.7 million barrel draw. Cushing showed a build of 536,000 barrels. Refined products were still mixed like the APIs; gasoline had a bit larger draw at 3.2 million barrels, and distillates had a larger build at 2.2 million barrels. The issues with the Colonial Pipeline is very evident in the gasoline statistics. Even though there was a total of a 3.2 million barrel draw, PADD I had a draw of 8.5 million barrels and PADD III had a 4.8 million barrel build. Since the release of the statistics, the market has remained about the same as early morning. As of 11:30 a.m. ET, WTI is up $0.014 to $43.44/bbl, HO is up $0.0212 to $1.4262/gal, and RBOB is up $0.0279 to $1.3925/gal.
There are two other pieces of news that are important to note. The first is the Federal Reserve’s announcement today at 2:00 p.m. ET and then Janet Yellen’s press conference at 2:30 p.m. ET. The announcement will be the Federal Reserve’s Federal Open Market Committee (FOMC) decision on interest rates. Economists do not expect an increase in rates. The second piece of news that can influence the market is the meeting between OPEC and Russia next week. The meeting is in Algeria and the countries will discuss the topic of oversupply and if an output freeze at current levels is an option.