Market Report & Analysis for 4/26/2019 Morning Edition
Morning Market Overview
New York Mercantile Exchange oil futures shifted lower and Intercontinental Exchange Brent crude futures ended flat on Wednesday, with West Texas Intermediate widening its discount to the international benchmark to a one- month high on a larger-than-expected build in U.S. inventories during the week ended April 19.
Oil futures were pressured by an unexpected 5.5 million bbl build in domestic crude oil inventories during the week profiled, according to Energy Information Administration supply report released on Wednesday. Government data showed the inventory increase was less than a 6.86 million bbl build reported by American Petroleum Institute on Tuesday, but still raised crude stockpiles to 30.9 million bbl, more than 18-month high.
EIA remained bullish on gasoline supply that dropped by a 2.1 million bbl to 225.8 million bbl in the profiled week, pressing inventories to below five-year average for a third consecutive week. Continued gasoline drawdowns supported by a strong domestic demand, with the four-week average at 9.442 million bpd, 88,000 bpd above the comparable year-ago period.
Saudi Arabia’s Energy Minister said on Wednesday that inventories continue to rise despite the latest developments in Venezuela and the tightening of sanctions on Iran, indicating that the kingdom would continue with the policy of supply cuts.
Al-Falih said Saudi Arabian crude production would remain within levels outlined in Organization of the Petroleum Exporting Countries- led output curbs, while Saudi Aramco’s crude allocations for June would be made in a couple of weeks. White House suggested on Monday that Saudi Arabia and other Gulf producers would offset lost Iranian barrels in global oil market. U.S. State Department said on Monday Iranian crude oil exports have plunged by 1.5 million bpd since the United States unilateral withdrawal from the 2015 nuclear deal with Tehran in May 2018. Market analysts forecast between 1.2 and 1.5 million bpd of additional volumes would be removed from global supplies following Trump administration decision not to extend waivers for importers of Iran’s crude oil.
NYMEX June WTI futures shifted $0.41 down to $65.89 bbl, while ICE June Brent settled $0.6 up to $74.57 bbl. NYMEX May RBOB futures edged down 0.31cts to settle at$2.1285 gallon, holding below Tuesday nearly seven-month high on the spot continuous chart. NYMEX May ULSD futures dipped 1.93cts to $2.0987 gallon, following a less-than-expected 700,000 bbl draw in distillate fuel inventories last week, which prompted selling in ULSD futures Wednesday afternoon.
