The API threw another wrench in rising oil prices by forecasting another large build for crude oil stocks. Markets quickly reverted lower, dragging down fuel prices as well. Crude oil this morning is trading at $52.16, down $1.11/bbl.
Fuel prices are once again pushing against recent lows. Diesel prices are currently trading at $1.8074, down 1.5 cents since Tuesday’s close. Gasoline prices are $1.7320, down 2.4 cents.
The API yesterday reported a surprise build for crude inventories, with stocks rising 5 million barrels week-over-week. Gasoline and diesel were somewhat less bearish, particularly diesel stocks, which fell 3.5 million barrels. Still, with the base product seeing burgeoning supplies, the entire oil complex is seeing prices drop.
The EIA released their monthly Short-Term Energy Outlook yesterday, giving some perspectives on the trends ahead. In line with the past year of forecasts, the agency dropped its demand forecast for 2019 and 2020 in light of economic concerns. In a more unusual twist, the agency also revised its supply forecast slightly lower, with lower oil prices incentivizing less new production. Still, dampening demand will outpace supply slowdowns, potentially sending crude prices lower in 2020. Notably, the forecast for diesel is higher demand later this year, due both to impending IMO 2020 implementation and to strong transportation demand.