Oil patch: crude prices falling after the Federal Reserve’s comments and inventory build
Our oil team argue that traders grew cautious yesterday after Jerome Powell’s testimony in Congress triggered a selloff in energy futures. Benchmark West Texas Intermediate (WTI) crude oil price traded down to $76.6 per barrel this week and seem to be stuck in a $70-$80 range this year.
Share this:
Benchmark West Texas Intermediate (WTI) crude oil price traded down to $76.6 per barrel this week and seem to be stuck in a $70-$80 range this year. Traders grew cautious yesterday after Jerome Powell’s testimony in Congress triggered a selloff in energy futures.
Inventories building, demand slowing
- Commercial crude inventories been building for the past 11 straight weeks, ahead of the typical seasonal pattern, up by 62 million barrels since mid-December
- Today’s Department of Energy’s Petroleum Report saw petroleum product inventories building against the seasonal trend
- Overall, petroleum product inventories increased by 2 million barrels, and are 2% above the 5-year seasonal average
- Implied oil demand fell by 1.4 million barrels per day, with gasoline and diesel demand dropping by 0.5 million and 0.3 million barrels per day respectively
- Crude oil inventories saw a 1.7 million barrels drawdown, even though exports dropped by 2.3 million barrels per day
- Gasoline inventories were down by 1.13 million barrels,some 4% below the 5-year seasonal average
- Diesel inventories were up slightly, even with exports increasing for the week
Diesel imports weaker
- European diesel imports were significantly down, by 270 million barrels, compared to a large amount of pre-buying ahead of sanctions on Russian diesel
- The region will continue to ramp up distillate imports from the Middle East and Asia to fill the gap left by Russian diesel
- In Europe, there has been a drop diesel and gasoil inventories in the so-called ARA storage hub (Amsterdam-Rotterdam-Antwerp)
- Europe needs to ramp up distillate imports from the Middle East and Asia to fill the gap left by Russian diesel
Keystone pipeline
- The US Pipeline and Hazardous Materials Safety Administration (PHMSA) ordered TC Energy to reduce operating pressure on more than 1,000 additional miles of the strategically important Keystone pipeline
- TC Energy claimed that technical factors in pipeline construction including bending stress and a weld flaw might have been the cause of a spill which is expected to cost around $480 million
Oil market analysis by Alex Hodes
Contact: [email protected]
The complete CFD trading experience
Award-winning platforms, competitive spreads, low commissions and dedicated support.
We live and breathe the markets and are dedicated to helping traders realise their ambitions as we continue to set the industry bar.
Economic calendar
Web Trader platform
Our sophisticated web-based platform is packed with features.
Related articles
Gold Update: XAU/USD Remains Under Pressure Even After the NFP Report
As the trading week comes to an end, weakness around gold price action remains evident in the short term. This can be seen in the performance of the past two sessions, where the metal has declined by approximately 0.3%. Although the move has not been particularly aggressive, it highlights that buying pressure continues to struggle to regain control of the market.
USD Sets Fresh Yearly High as EUR/USD Drops Dramatically, USD/JPY Stable
Well, it was a week of USD strength that wasn’t entirely pushed by USD/JPY, as a strong sell-off in EUR/USD has pushed the major pair to its most oversold state in a decade.
Dow Jones Forecast: DJIA rises after weaker jobs data
U.S. stocks are rising after weaker-than-expected U.S. jobs data saw markets rein in rate hike expectations.
StoneX Europe Ltd may make third party material available on this website which may contain information included but not limited to the conditions of financial markets. The material is for information purposes only and does not contain, and should not be construed as containing, investment advice and/or investment recommendation and/or an investment research and/or an offer of or solicitation for any transactions in financial instruments; any decision to enter into a specific transaction shall be made by the client following an assessment by him/her of their situation.
StoneX Europe Ltd makes no representation or warranty and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplied. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. We are not under any obligation to update any such material. Any opinion made may be personal to the author and may not reflect the opinion of StoneX Europe Ltd.