DOE Insights January 10, 2019

CRUDE OIL

Crude Oil Stocks Draw, Less than Expectations

The DOE reported Total Crude Oil Inventories decreased by 1.7 million barrels to 439.7 million barrels for the week ending January 4, 2019, while expectations average was for a 2.8 million barrel decrease.

Overall hydrocarbon supplies increased by 13.3 million barrels to 1,905 million barrels.

Crude Oil Production increased by 100,000 barrels per day to 11.7 million barrels per day.

Total Crude Imports were up 500,000 barrels per day at 7.8 million barrels per day.

Total Refinery Crude Runs were down 200,000 barrels per day at 17.57 million barrels per day.

The DOE report was bearish for crude oil prices as the stocks draw was less than expected. However, after an initial price drop with the release of the report, prices rallied and were up about $2.50 by the end of the trading day. Prices have rallied $10 from their lows in December with new reports of Saudi Arabian exports being cut to 7.1 million barrels per day.  Prices have also been supported by US and China trade talks which has reduced some fears of a global economic slowdown. As we have mentioned before, we expect prices to be more affected by news headlines than fundamental supply/demand information and this was the case today. This means crude oil prices will continue to be volatile.

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, Much Greater than Expectations

Total MotorGasoline Inventories increased by significant 8.1 million barrels to 248.1 million barrels for the week ending January 4, 2019. The expectations average was for a 3.4 million barrel increase.

Implied Demand was down by 470,000 barrels per day to 8.79 million barrels per day.

Gasoline Production was down 140,000 barrels per day to 9.39 million barrels per day.

The DOE report was very bearish to gasoline prices. However, gasoline prices tracked crude oil prices, trading down after the release, but then a strong rally for the rest of the trading day.

DISTILLATES

Distillates Stocks Build, Much Greater than Expectations

Total Distillates Stocks increased by large 10.6 million barrels to 140.0 million barrels for the week ending January 4, 2019, while expectations average was for a 1.9 million barrel build. 

Total Distillates Production was up 30,000 barrels per day to 5.56 million barrels per day. 

Total Distillates Implied Demand down by 120,000 barrels per day at 4.31 million barrels per day.

The DOE report was also very bearish to distillates prices.  However, prices tracked crude oil prices, trading down after the release, but then a strong rally for the rest of the trading day.

For further information contact joel.fingerman@fundamentalanalytics.com

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