Market Report & Analysis for 3/22/2019 Morning Edition

Morning Market Overview

Futures markets registered sharp gains during the midweek session on bullish weekly supply data, with the April West Texas Intermediate contract expiring at a four-month high on the spot continuation chart after topping $60 bbl for the first time since mid-November.

NYMEX April WTI expired up $0.80 at $59.83 bbl after trading at a $60.12 bbl four-month spot high, with the May contract settling at a $0.40 premium to the April contract at $60.23 bbl. ICE May Brent futures rallied $0.89 to a $68.50 bbl four-month high settlement on the spot continuation chart, ending near a $68.57 intraday high. NYMEX April RBOB futures rallied to a $1.9190 fresh five-month high on the spot continuous chart, settling near the high water mark at $1.9166 gallon for a 2.35cts gain. April ULSD futures settled up 1.77cts at $2.0081 gallon, easing 60 points from a $2.0141 two-week high.

Oil futures rallied as the Energy Information Administration reported a 9.6 million bbl drawdown from U.S. commercial crude inventory during the week- ended March 15 that pressed stocks to a nine-week low at 439.5 million bbl. The steep drawdown during the refinery maintenance season was driven by a sharp increase in U.S. crude exports, up 846,000 bpd to 3.392 million bpd, as the global oil market tightens.

Data released yesterday illustrates production cuts by the Organization of the Petroleum Exporting Countries and non-OPEC oil producers and U.S. sanctions on Iran and Venezuela are having an effect on U.S. oil inventory, with a year-on-year surplus in commercial crude stocks narrowing a sharp 22.827 million bbl or 67% during the four weeks ended March 15 to 11.2 million bbl or 2.6%.

A year-on-year surplus in total U.S. commercial crude and products stocks have dropped 45.21 million bbl or 3.6% since mid-January when they reached a 15-month high to a 1.2219 billion bbl 6-1/2 month low last week.