Dollar Surge Causes Quick Oil Price Decline
After 3 consecutive trading sessions of mid-day price hikes, crude ended the day yesterday at it’s lowest closing price this week. Comments made by Fed Chairman Jerome Powell about strong economic growth and increasing interest rates strengthened the dollar, sending commodities crashing. In under 2 hours, crude lost $1.05 to close the day at $63.01, completely erasing this week’s gains. Prices continue their downward trend this morning giving up another 4 cents to trade at $62.97.
Refined products also posted major losses yesterday after a crashing market and a mixed API report. Diesel fell nearly 3 cents despite a larger than expected draw reported by the API. Gasoline, which saw a surprise inventory build, lost 3.5 cents during yesterday’s trading session. Both products continue to fall this morning with diesel trading half a cent lower at $1.9584 and gasoline at $1.7943, down just under a penny.
Yesterday’s mixed API report was overall bearish for the market. Gasoline posted a build of 1.9 MMbbls, contradicting the markets expectation of a small draw in inventories. Crude oil also saw a build, though far smaller than market expectations. Diesel inventories drew by 1.4 MMbbls, surpassing the 0.7MMbbls predicted by the market. The market is anticipating the EIA report that will be coming out later this morning.
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