Market Report & Analysis for 5/3/2018 Afternoon Edition

Afternoon Market Overview

The API started the weekly inventory report cycle with a larger than expected build in crude oil stocks, a surprise build in gasoline inventories but offset somewhat by a larger than expected draw in distillate fuel inventories.

Total combined inventories of crude oil and products were modestly higher on the week. Overall the market was lower the after the report was issued. The API reported US crude oil stocks increased by 3.4 million barrels on the week. Cushing crude oil stocks increased by 0.7 million barrels. They also reported a 4.1 million bbl draw in distillate fuel inventories and a 1.6 million bbl build in gasoline stocks.

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