Market Report & Analysis for 4/12/2019 Morning Edition

by | Apr 11, 2019 | EMI, Fuels & Markets, FutureRack, Industry News

Morning Market Overview

Crude and refined product futures pulled back in overnight trade following Wednesday’s rally, as a build in U.S. crude stocks was balanced by a larger- than-expected drawdown in gasoline inventories. The International Energy Agency said on Thursday the Organization of the Petroleum Exporting Countries reached a 153% compliance rate with their production cut agreement in March, as output from 14-member group declined by 550,000 bpd to 30.1 million bpd.

In its monthly Oil Market Report, IEA estimated global oil supply declined 340,000 bpd to 99.2 million bpd in the reviewed month, due to steep cuts from Saudi Arabia and losses in Venezuela. Paris-based agency maintained estimates for world oil consumption to expand 1.4 million bpd to 100.6 million bpd this year, driven by strong consumption rate in China, India and the United States.

In Organization of Economic Cooperation and Development countries “demand fell in 4Q18 for the first time since end-2014 and also in 1Q19, mainly on weaker European numbers, but it will recover, led by the US,” IEA said. According to the data, commercial oil stocks held by OECD countries fell a sharp 21.7 million bbl in February due to “larger gasoline draws and a lower crude build”.

The lower print comes on the heels of a significant 7.1 million bbl build in U.S. commercial crude oil inventories in the first week of the second quarter, bringing stocks to a six-week high.

Data released on Wednesday missed market expectations of a 2.5 million bbl build, capping WTI futures advance midweek. The realized build was more than offset by a large draw in gasoline inventories in the week end-April 5. U.S. gasoline stocks plunged 7.7 million bbl in the profiled week to 229.13 million bbl, the lowest level since Dec. 7, 2018.