Weaker Dollar Keeping Fundamentals at Bay

By: Daniel Guttman / April 28, 2016

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.Capture428.png

 


Categories: Daily Market Update


Daniel Guttman

Written by

Daniel Guttman

With a background in wholesale and commercial sales as well as pipeline scheduling, Daniel is currently the Manager, Business Development in the Card Access Fuels department. He is tasked to find new and innovative solutions to increase sales opportunities for the sales team while managing and evaluating internal department processes. He assists with day to day personnel management, customer data analysis, as well as the daily Pacific Pride inventory and pricing direction.


Guttman Energy Daily Market Update Disclaimer – The information contained in this market update is derived from sources believed to be reliable; however this update could include technical inaccuracies or typographical errors and Guttman Energy does not guarantee the accuracy, completeness or reliability of this update. FURTHERMORE, THIS UPDATE IS PROVIDED "AS IS," WHERE IS, WITH ALL FAULTS AND WITHOUT ANY WARRANTY OR CONDITION OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY. GUTTMAN ENERGY ALSO SPECIFICALLY DISCLAIMS ALL EXPRESS AND IMPLIED WARRANTIES. YOU USE THIS UPDATE AT YOUR SOLE RISK. This update and any view or comment expressed herein are provided for informational purposes only and should not be interpreted in any way as recommendation or inducement to buy or sell products, commodity futures or options contracts.


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