DOE Insights June 5, 2019

Crude Oil

The DOE reported Total Crude Oil Inventories increased by 6.8 million barrels to 483.3 million barrels for the week ending May 31, 2019, while the expectations average was for an 800,000 barrel draw.

Overall hydrocarbon supplies increased by large 22.4 million barrels to 1,308 million barrels.

Crude Oil Production increased by 100,000 barrels per day to 12.4 million barrels per day.

Total Crude Imports increased by 1.1 million barrels per day to 7.9 million barrels per day.

Total Refinery Crude Runs increased by 200,000 barrels per day to 16.94 million barrels per day.

The DOE report was very bearish for crude prices, prices were down by as much as $2.75, but recovered ending that day down about $1.75. Formally, crude prices are in a bear market as they have fallen more than 20% from their April peak The increasing global supply of crude oil along with concerns of ever  slowing demand growth for crude have caused the bear market.

Gasoline

Gasoline Stocks Build, Greater than Expectations
Total MotorGasoline Inventories increased by 3.2 million barrels to 234.1 million barrels for the week ending May 31, 2019. The expectations average was for a 600,000 barrel increase.
Implied Demand was up by 50,000 barrels per day to 10.7 million barrels per day.
Gasoline Production increased by 190,000 barrels per day to 10.05 million barrels per day.
The DOE report was very bearish to gasoline and prices tracked crude, ending the trading day down about 2.8 cents, or about $1.16 a barrel. The counter seasonal change in gasoline stocks and demand falling during summer driving season are pressuring prices.

Distillates

Distillates Stocks Very Large Build, Greater than Expectations.
Total Distillates Stocks increased by a record 4.6 million barrels to 129.4 million barrels for the week ending May 31, 2019, while the expectations average was for a 500,000 barrel build.
Total Distillates Production increased by 220,000 barrels per day at 5.40 million barrels per day.
Total Distillates Implied Demand decreased by 730,000 barrels per day to 5.24 million barrels per day.
The DOE report was very bullish to heating oil prices, and prices were down about 4.5 cents, $1.89 per barrel, by the end of the trading day.   Crack spreads and outright prices, while relatively strong, are weakening to near their lowest levels in the last year. If there is a significant slowdown in global economic growth, it will likely be reflected in falling diesel fuel prices.
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Regards,
The Fundamental Analytics Team

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