Market Report & Analysis for 10/18/2018 Morning Edition

Morning Market Overview

Oil futures on the New York Mercantile Exchange moved higher Tuesday ahead of weekly supply estimates, with Brent crude on the Intercontinental Exchange also advancing amid unsavory revelations that a Saudi citizen, reporter for the Washington Post and critic of Saudi Arabia’s ruling family might have been murdered in the Saudi consulate in Istanbul, Turkey.

Oil futures ended mixed trading higher on expectations U.S. commercial crude stocks registered a 1.5 million bbl build during the week ended Oct. 12, which compares with a 6.0 million bbl increase during the previous week and an 8.0 million bbl jump two weeks earlier.

Expectations for the smaller build follow production shut-ins in the Gulf of Mexico last week because of Hurricane Michael that reached about 700,000 bpd at one point. The market also anticipates a 1.2 million bbl draw took place in distillate fuels for the week profiled that would be the fourth weekly decline if realized. Distillate fuel inventory remains below normal, with inventory drawn down 6.6 million bbl since mid-September.

U.S. gasoline supply is estimated to have fallen by 400,000 bbl during the second week of October. Gasoline stocks are at a 236.2 million bbl record high for this time of year, data from the Energy Information Administration shows. Despite bloated gasoline supply NYMEX November RBOB futures led Tuesday’s advance, rallying amid oversold market conditions after trading down to a $1.9081 gallon seven-month spot low on Friday (10/12).

November RBOB futures settled up 3.3cts at $1.9773 one-week high. NYMEX November ULSD futures settled up 1.45cts at $2.3402 gallon. NYMEX November West Texas Intermediate settled up $0.14 at $71.92 bbl, with the ICE December Brent contract gaining $0.63 with an $81.41 bbl settlement.