Inventories Follow Seasonal Pattern

Lessening tensions in the trade war with China continue to give hope to the markets – oil prices are trading higher this morning.  WTI Crude is trading at $57.49, a gain of 9 cents.

Fuel is also trading higher today.  Diesel is trading at $1.9349, a gain of 0.4 cents.  Gasoline is also higher this morning, trading at $1.6057, up 1.5 cents.

Crude rose through yesterday morning on news that the new Saudi energy minister would continue or even deepen supply cuts through OPEC+.  The markets reversed on the news of Trump firing his National Security Advisor John Bolton, known for his aggressive foreign policy stances.  The absence of Bolton may signal a softer stance to working with Iran, though the administration has noted that current foreign policy stances will continue.

The API reports a larger than expected draw for crude, which is helping to lift markets.  At Cushing, the API sees inventories falling by 1.4 MMbbls, which would be the 10th consecutive draw and bring Cushing stocks to their lowest level since November 2018. Cushing fuel inventories have important symbolic value since WTI crude oil is based on Cushing prices.

The API’s data last night was:

The EIA released their updated Short-Term Energy Outlook report which gives a view on the coming year of energy trends. EIA estimates that production declined in August compared with July 2019. The production decline was also the largest year-on-year decrease since September 2017. Fuel demand growth projections continue decelerating, with 2019 demand growth expected to be just 0.9 MMbpd globally, down from last month’s forecast of 1.0 MMbpd. The EIA cites Oxford Economics in its projections for dampened GDP growth in the future.

Finally, we see a disturbance in the Atlantic tagged as system Invest 95L.  This system has the chance to form into a named storm, possibly rising to become a Tropical Storm before making landfall.  Currently, Invest 95L is on track to bring locally heavy rain and wind to parts of Florida late this week.  It is expected to move into areas of the northern Gulf Coast and Deep South early next week.  We will keep an eye on this system and give further updates as events warrant.

Market Condition Report - Disclaimer
The information contained herein is derived from sources believed to be reliable; however, this information is not guaranteed as to its accuracy or completeness. Furthermore, no responsibility is assumed for use of this material and no express or implied warranties or guarantees are made. This material and any view or comment expressed herein are provided for informational purposes only and should not be construed in any way as an inducement or recommendation to buy or sell products, commodity futures or options contracts.

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