Commodity and global equity markets got smoked yesterday due to a surge in the U.S. dollar index which was perpetuated by fears of Turkish contagion and a surprise build in crude oil inventories.
Fears of a contagion in the banking and currency markets led to a selloff in global equity markets yesterday and a flight to safety with traders pushing the U.S. dollar index north of 96.5, a 14 month high. This alone would have put pressure on crude oil prices, but the DOE report amplified the selloff.
Yesterday, crude oil inventories increased 6.8 million barrels which made the bears come out swinging as that report greatly differed from Tuesday morning’s guestimate of a 2.7 million barrel draw. September WTI settled down $2.03 to $65.01/barrel, its lowest settle in about 2 months. Distillate inventories built 3.6 million barrels, gasoline drew 0.7 million barrels, and U.S. production increased 100,000 barrels to 10.9 million barrels per day last week. OPIS reported that “refiners ran more crude oil than they ever have and ran a record level of total feedstock” as refiners are now running at 98.1% capacity.
Oil trading is a mixed bag today with September WTI up $0.41 to $65.43/barrel, RBOB down $0.0204 to $1.9770/gallon, and ULSD up $0.0057 to $2.0961/gallon. The dollar index is a bit softer, last at 96.41 and the Dow Jones Industrial Average is trading up around 400 points today. With all that being said, this may be a buying opportunity for any customers looking to lock in oil prices. Call your Guttman Energy sales representative today!