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Crude Oil Stocks Build, Less than Expectations
The DOE reported Total Crude Oil Inventories increased by 1.3 million barrels to 447.2 million barrels for the week ending February 1, 2019, while the expectations average was for a 2.2 million barrel build.
Overall hydrocarbon supplies decreased by 3.4 million barrels to 1,259 million barrels.
Crude Oil Production remained at a record 11.9 million barrels per day.
Total Crude Imports increased by 100,000 barrels per day to 7.1 million barrels per day.
Total Refinery Crude Runs were up 200,000 barrels per day to 16.63 million barrels per day.
The report was bullish to crude oil and prices had been trading negative before the release of the report, but then rallied and finished up about 30 cents by the end of the trading day.

It appears that OPEC and Russia have been cutting crude oil production according to last year’s agreement.  A Reuters survey reported that OPEC has delivered almost three-quarters of its pledged cuts.  However, the stronger US dollar will limit crude oil price increases.

We would be happy to discuss this commentary with you and provide additional market insights.
Feel free to call us at 312-348-7518 or email us at joel.fingerman@fundamentalanalytics.com.

Gasoline
 
Gasoline Stocks Build, Less than Expectations 
 
Total MotorGasoline Inventories increased by 500,000 barrels to 257.9 million barrels for the week ending February 1, 2019.  The expectations average was for a 1.6 million barrel increase.
Implied Demand was up by 400,000 barrels per day to 10.4 million barrels per day.
Gasoline Production decreased by 50,000 barrels per day to 9.86 million barrels per day.

The DOE report was also bullish to gasoline prices.  Gasoline prices rallied with the report release, but not as strong as crude oil.  Despite the relatively strong demand for gasoline for this time of the year, the gasoline margins, crack spread, decreased.  The margins are currently not profitable.

Distillates
Distillates Stocks Draw, Greater than Expectations
 
Total Distillates Stocks decreased by 2.3 million barrels to 139.0 million barrels for the week ending February 1, 2019, while the expectations average was for a 1.8 million barrel draw.
Total Distillates Production was up by 100,000 barrels per day to 5.12 million barrels per day.
Total Distillates Implied Demand increased by 590,000 barrels per day to 5.90 million barrels per day.

The DOE report was even more bullish to distillates prices than gasoline prices.  Heating oil prices rallied with the report release, and stronger than crude oil.  Cold weather and the large stocks draw supported heating oil prices and the heating oil crack increased.

For further information contact joel.fingerman@fundamentalanalytics.com

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