Yesterday, HO settled up $0.0470 to $1.3795 and RBOB gained $0.0148 to $1.5808. June WTI crude advanced $1.29 to $45.33/bbl.
The market is currently trading up about a cent on HO and down a cent on RBOB after crude and refined products prices hit 2016 highs in trading yesterday. The market is still holding fairly steady, currently trading on continuing weakness in the U.S. dollar, sentiment of domestic crude production cuts, persistent and growing gasoline demand in the U.S. (currently holding above 9 million b/d), and the Fed’s decision to preserve interest rates. For the past 18 weeks U.S. rig counts have declined to pre-2009 levels, and tomorrow the most recent Active Rig Count Report will be released by Baker Hughes.
According to analysts, yesterday’s crude's rally was likely overdone. These higher prices could boost production, which would intensify the global supply glut. If prices approach $50 a barrel, U.S. shale drillers could ramp up production, potentially increasing the supply surplus that continues to support the collapse from the $100 levels of mid-2014.
Yesterday’s EIA data contradicted API’s expectation of gasoline inventory draws, with gasoline stocks rising a reported 1.61 million barrels in addition to a 2.0 million build in crude inventories, to the highest level ever of 541 million bbls. Distillates showed a surprising draw of 1.7 million bbls. Gas and distillate demand reportedly dropped by 400,000 bpd this week.