Mixed Oil Price Action following EIA Report

By Published On: April 8, 2021Categories: Daily Market News & Insights

Yesterday saw crude and diesel prices rise thanks to supportive inventory news, while gasoline’s surprise build triggered a small price drop. Adding to inventory news, the Federal Reserve indicated they would continue with current supportive policies, providing continued aid to the recovering US economy. We shared yesterday that Iran could become the next major topic for oil markets – then yesterday the State Department announced it was prepared to lift sanctions “inconsistent” with the 2015 nuclear deal. Although the statement stops short of listing which sanctions or detailing how and when sanctions will be lifted, it shows a continued commitment to moving negotiations forward.

The EIA’s weekly report showed falling crude inventories and rising refined fuel stocks. The only surprise was the notable gasoline build: stocks built by 4 million barrels, compared to an expected 0.7 million-barrel draw. The main contributor to the build was rising gasoline imports, especially on the East Coast. Vaccine distribution hiccups in the EU have kept demand weak, so unused gasoline barrels are finding their way to the US.

Refinery utilization also continues its long recovery trek, climbing a tiny bit this week to 84.0%. The February winter storm is now long behind us, with national throughput exceeding pre-storm production. But with demand still below normal seasonal levels, refiners have not been able to get back to the 87%-91% utilization range typical of early April.

This article is part of Daily Market News & Insights


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