Oil prices rose yesterday, bringing crude back from a two month low. This was likely due to the DOE statistics confirming the API’s prediction of draws on both crude and distillate inventories. This is now the ninth week in a row that crude inventories decreased. While some analysts believe this streak is an indication that the global supply glut is easing, others maintain that the glut is still quite alive and well due to the amount of gasoline being produced, imported/exported, and consumed.
With yesterday’s confirmed build of 911,000 barrels of gasoline, it seems like the concerns will stick around for the time being. With gasoline inventories high and the switch to lower-cost winter spec gasoline just around the corner, an argument can be made for lower prices. On the crude side, while the nine week streak of inventory draws is impressive, bear in mind that current crude levels are at historic highs for this time of year. Right now crude inventories are at 519.5 barrels vs. last year’s 463.9 barrels.
As of 11:02 am, heating oil is down 66 points, RBOB is up 59 points and crude is down 29 cents respectively.