Afternoon Market Overview

The API started the weekly inventory report cycle with an expected draw in crude oil stocks, a larger than expected draw in gasoline inventories while distillate fuel inventories declined more than the expectations.

Total combined inventories of crude oil and products were modestly lower on the week. Overall the market added gains in crude oil and gasoline while reducing some of the intraday losses for ULSD after the report was issued. The API reported US crude oil stocks decreased by 1 million barrels on the week. Cushing crude oil stocks increased by 1 million barrels. They also reported a 0.9 million bbl draw in distillate fuel inventories and a 2.5 million bbl draw in gasoline stocks.

Total combined inventories of crude oil and refined products were lower for the week and outside the range of market expectations. Crude oil stocks likely decreased even as refiner demand for crude oil decreased slightly while refined product inventories are projected to decline in this week’s report.

Canadian imports into the US for the week ending April 6 decreased by 29,000 bpd to 3.401mn bpd and are now 234,000 bpd below the previous all-time record- high reached early in 2017, per the U.S. Energy Information Agency. We are maintaining our overall oil view and short-term bias at cautiously bullish.

The current fundamentals are still supportive, and the externals are mostly supportive. The next few fundamental snapshots will provide further directional guidance.