Petroleum Futures Trade Higher Amid Expectations of Crude Build, Then Fall Back

Strategic Insights -

Petroleum futures on the New York Mercantile Exchange (Nymex) traded higher for most of Tuesday, with market-watchers anticipating a 2 million bbl crude build, according to American Petroleum Institute (API) weekly stock reports. However, the API figures for the week ended April 17 showed a 3.29 million bbl crude stock increase, a 1.35 million bbl rise in gasoline stocks, and a 111,000 bbl increase in distillate stocks. Despite bearish fundamentals, the May Nymex light, sweet crude contract ended the day up 4 cents at $15.45/bbl.

Key Takeaways:

  • The American Petroleum Institute's weekly stock reports showed a 3.29 million bbl crude stock increase, contrary to market expectations of a 2 million bbl build.
  • Gasoline stocks rose by 1.35 million bbl, and distillate stocks increased by 111,000 bbl.
  • The refinery utilization rate remained unchanged at 96.2% of capacity.
  • May Nymex light, sweet crude futures contract ended the day up 4 cents at $15.45/bbl, after reaching a high of $16.22/bbl.
  • The June contract lost momentum but still ended the day up 7 cents at $15.98/bbl.
  • May gasoline surged to an intraday high of 53.70 cents/gallon but retreated to end the day up just 0.26 cents at 52.68 cents/gallon.
  • The Gulf Coast premium conventional gasoline market was in short supply, causing prices to rise.
  • The surge in prompt cycle V1 gasoline was caused by multiple refinery outages over the past two weeks, resulting in high dollar prices for premium gasoline grade.
  • Refiners are expected to reuse premium gasoline grade later this summer, potentially causing future supply issues.

Statistics:

  • Crude stocks rose by 3.29 million bbl.
  • Gasoline stocks rose by 1.35 million bbl.
  • Distillate stocks increased by 111,000 bbl.
  • Refinery utilization rate remained at 96.2% of capacity.
  • May Nymex light, sweet crude futures contract ended the day up 4 cents at $15.45/bbl.
  • June Nymex light, sweet crude futures contract ended the day up 7 cents at $15.98/bbl.
  • May gasoline surged to an intraday high of 53.70 cents/gallon.
  • Gulf Coast premium conventional gasoline prices started rising ahead of Monday's Colonial Pipeline scheduling.
  • Prompt cycle V1 gasoline prices jumped over 2.5 cents/gallon and are nearly 3 cents over the front-month Nymex gasoline futures price.

Sources:

  • American Petroleum Institute (API) weekly stock reports
  • New York Mercantile Exchange (Nymex) futures contracts data
  • Colonial Pipeline scheduling information
  • Natural Gas Intelligence (NGI) market reports