Inventory Data Nudges Crude and Product Prices Higher

Strategic Insights -

Mildly bullish inventory data had a significant impact on the energy market, nudging crude and product prices toward an uptrend on the New York Mercantile Exchange (Nymex). The American Petroleum Institute (API) report of a small draw on crude stocks lent support to the November crude contract, which retraced Tuesday's losses to settle up 24 cents at $17.57/bbl. However, news of a buildup in reformulated gasoline (RFG) stocks in the East Coast had mixed effects on the market. The API's report of a 1.25 million bbl buildup in gasoline stocks, with a significant portion being a 2.22 million bbl build in East Coast RFG stocks, undermined New York Harbor RFG prices. Despite this, gasoline on Nymex rebounded after morning weakness, settling up 0.76 cents at 54.55 cents/gallon.

Key Takeaways:

  • Crude prices on Nymex showed a 24-cent increase to settle at $17.57/bbl, following a small draw on crude stocks reported by the API.
  • Reformulated gasoline (RFG) stocks in the East Coast showed a significant buildup, with API reporting a 2.22 million bbl increase, which had a mixed effect on the market.
  • Gasoline on Nymex rebounded after morning weakness, settling up 0.76 cents at 54.55 cents/gallon, despite the mixed news on RFG stocks.
  • Distillate stocks showed a surprisingly large draw of 2.23 million bbl, which gave prices a needed boost.
  • The October heating oil contract settled up 0.79 cents at 49.02 cents/gallon, after reaching a daily high of 49.10 cents.
  • Refineries are still not at last year's production levels and are expected to undergo a steep turnaround season, potentially leading to a boost in production in November.

Statistics:

  • The November crude contract on Nymex increased by 24 cents to settle at $17.57/bbl.
  • API reported a 2.22 million bbl build in East Coast RFG stocks.
  • Gasoline on Nymex settled up 0.76 cents at 54.55 cents/gallon.
  • Distillate stocks showed a 2.23 million bbl draw.
  • The October heating oil contract increased by 0.79 cents to settle at 49.02 cents/gallon.
  • Refineries are currently behind last year's production levels, with stocks now 11 million bbl behind year-ago levels.

Sources:

  • Sources said
  • American Petroleum Institute (API)
  • New York Mercantile Exchange (Nymex)
  • Dean Witter Reynolds Inc.
  • Gulf Coast trader