Products Build= Market Drops

Yesterday, WTI closed up $.015/bbl to $57.62, HO closed up $0.0194/gal to $1.9139, and RBOB finished up $0.0262/gal to $1.7184. After the release of the API statistics last night, those gains came right back off. The APIs reported a crude inventory draw of 5.5 million barrels and 2.0 million of that draw was in Cushing, the decrease in crude was expected because this week’s numbers still factor in issues with the pipeline. The bearish stats were on refined products; gasoline inventories build 9.2 million barrels, and distillates built 4.3 million barrels.

The OPEC rhetoric seems to be factored into oil prices by now and the market is reacting to the weekly inventory statistics. As of 11:00 a.m. ET, both HO and RBOB are down about $.0350/gal and WTI is down $1.00/bbl.

The DOE statistics pretty much mirror what the APIs reported. Crude inventories showed a draw of 5.6 million barrels, 2.7 of that coming from Cushing, OK. Both refined products still had builds, just not quite as substantial. Gasoline inventories built by 6.8 million barrels, and distillates by 1.7 million barrels.

Key support levels to start the day were WTI at $57.20, HO at $1.8975, and RBOB at $1.6916. The market is well below these values already.

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We Wait For Tomorrow

Yesterday, Jan WTI closed down $0.12/bbl to $57.99, Dec RBOB closed down $0.0173/gal to $1.7720, and Dec HO finished up $0.0029/gal to $1.9507. After close, the API statistics were released and initially the stats were interpreted as very bearish and the market dropped off across the board.  The API statistics showed a build in crude inventories of 1.8 million barrels, however Cushing showed a draw of 3.2 million barrels.  Gasoline inventories dropped 1.5 million barrels, and distillates built 2.7 million barrels.  The build in crude had the market off, but since this morning it has come back some because the large build was in PADD V.  The 3.2 million barrel draw in Cushing was a result of the leak and shutdown of the Keystone Pipeline. 

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Which Direction?

Yesterday, oil prices softened a bit after Monday’s large rally that hit two year highs. WTI Crude closed down $0.15/bbl to $57.20, RBOB closed down $0.0147/gal to $1.8153, and HO finished down $0.0203/gal to $1.9219.  The market continued downward after American Petroleum Institute (API) statistics were released yesterday afternoon.  API reported a much smaller draw in crude inventories then expected at 1.6 million barrels.  Gasoline inventories built 520,000 barrels, while distillates drew 3.1 million barrels.  The surprising crude statistics is outweighing the draw in distillates, because as of 10:15 a.m. ET HO is down almost $0.01/gal, RBOB is down $0.0170/gal and WTI is down $0.35/bbl. 

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What Will November Bring?

Yesterday was the last trading session of the month for the November (X) futures and all products are now trading prompt month December (Z) futures.  WTI crude closed up $0.23/bbl to $54.38, Dec HO finished up $0.0043/gal to $1.8805, and Dec RBOB closed up $0.0193/gal to $1.7325.  The market continues to trade higher into today’s trading session.  The API statistics last night were extremely bullish with large draws reported across the board.  Crude inventories drew 5.1 million barrels, distillates drew 3.1 million barrels, and gasoline drew 7.7 million barrels.  Also supporting prices is the continued rhetoric around OPEC extending production cuts until the end of 2018.  Rebalancing rhetoric is likely to continue all the way up till the official meeting towards the end of this month in Vienna.

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Bearish News Drives the Market Down

Yesterday, WTI crude closed up $0.57/bbl to $52.47, HO closed up $0.0343/gal to $1.8221, and RBOB finished up $0.0372/gal to $1.7155.  The rally in oil prices was a result of further indication that Saudi Arabia is committed to the production cut to reduce the global oversupply in oil.   

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La Nina?

Yesterday, WTI crude finished up $1.34/bbl to $50.92, HO closed up $0.0297/gal to $1.7649, and RBOB finished up $0.0321/gal to $1.5915.  Prices found support yesterday from the news that Saudi Arabia plans to cut November crude exports by 560,000 barrels/day in efforts to stabilize prices along with OPEC’s production cut until March 2018.  Also helping boost oil prices is the weaker U.S. dollar. 

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$60 Oil?

Yesterday, WTI crude closed down $0.34 to $51.88, HO closed down $0.0110/gal to $1.8453, and RBOB finished down $0.0232/gal to $1.6988.  The losses in yesterday’s session were a slight correction from Monday’s rally.   WTI crude is holding above the key psychological level of $50/bbl and is thought to be headed towards $60/bbl by years end.  It is important to note, the spread between WTI/Brent is the widest it has been in 2 years.  WTI closed yesterday at $51.88/bbl and Brent closed at $58.44/bbl, over a $6/bbl spread. 

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Market Rallies After Bullish Stats

Yesterday, WTI crude closed up $0.16/bbl to $48.23, RBOB closed up $0.0218/gal to $1.6563, and HO finished down $0.0021/gal to $1.7406.  This morning, oil prices are trading slightly up after the API statistics last night, OPEC and demand rhetoric, and the weakened U.S. dollar.  The API statistics were exactly what were expected after Hurricane Harvey- a build in crude inventories and draws in refined products.  Crude built by 6.2 million barrels, 1.3 million barrels from Cushing, OK.  Gasoline drew by a surprising 7.9 million barrels, and distillates drew 1.8 million barrels.  News surrounding the recent Hurricanes have been the main focus as of recent, but yesterday the OPEC rhetoric started again.  OPEC reduced output in August by 79,000 barrels per day to 32.76 million barrels per day. Another bullish piece of news from yesterday was the IEA released increased demand forecast for the rest of 2017 and into 2018. 

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Harvey Hinders Production

Harvey continued orchestrating refined products higher and WTI crude lower in yesterday’s trading session.  WTI crude closed down $0.13/bbl to $46.44, HO closed up $0.0303/gal to $1.6655, and RBOB closed up $0.0710/gal to $1.7833.  As of 9 a.m. EST, HO is trading up over $0.0425/gal, and RBOB is up over $0.11/gal.  The rally tailwinds continue as more news about refinery shutdowns are disseminated. This morning it was reported that the nation’s largest refinery, Motiva’s Port Arthur 600,000 barrels per day, is now offline. The total estimate of refining capacity that has been shut down stands at over 4 million barrels.  Below is an updated list of U.S. Gulf Coast refineries that have cut production or shut down completely:

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Technicals Take the Title

Yesterday, WTI closed down $0.04/bbl to $47.55, RBOB finished up $0.0028/gal to $1.5795, and Heating Oil finished down $0.0061/gal to $1.5996.  With headlines on the lighter side, one thing to note was the stronger U.S. Dollar putting some pressure on oil prices (see chart below).  Also, the normal rhetoric around global oversupply, paired with concerns over demand, was a continuing factor yesterday. 

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