Market Report & Analysis for 5/24/2018 Afternoon Edition

Afternoon Market Overview

The API started the weekly inventory report cycle with a smaller than expected draw in crude oil, a surprise build in gasoline stocks, with distillate fuel inventories declining within the market expectations.

Total combined inventories of crude oil and products were lower on the week. The API reported US crude oil stocks decreased by 1.3 million barrels on the week. Cushing crude oil stocks decreased by 0.8 million barrels. They also reported a 1.3 million bbl draw in distillate fuel inventories and a 1 million bbl build 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 as refiner demand for crude oil increased while refined product inventories are projected to decline in this week’s report. Canadian imports into the US for the week ending May 11 decreased by 176,000 bpd to 3.474mn bpd and are now 161,000 bpd below the previous all-time record- high reached several weeks ago, 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.