After moderate losses during yesterday’s trading session, oil prices are recovering slightly, supported by surprising oil inventory data from the API. While economic stimulus remains the critical story of the day, markets are also eyeing geopolitical unrest in some areas of the world.
In the Middle East, Iran appears to have built a replica aircraft carrier with the express intentions of launching missiles at it for a military exercise. The missile strikes took place in the Strait of Hormuz, one of the world’s most important hotspots for maritime oil deliveries. Although the exercise has had no direct impact on shipments through the critical strait, it serves as a salient reminder that tensions between the US and Iran remain high, particularly following America’s drone strikes on Iranian General Soleimani in January.
The API released its weekly inventory report, which showed a steep crude draw compared to an expected build. Declining crude stocks are supporting the market despite surprise builds for both diesel and gasoline. Markets will watch for the EIA’s data later today.
Crude oil prices this morning are posting moderate gains. WTI crude is trading at $41.34, up 30 cents from Tuesday’s closing price.
Fuel prices are mixed. Diesel prices are feeling support from the moderate build, which signals a slowdown in inventories builds. Diesel is trading at $1.2608, up 1.9 cents. Gasoline, which saw a surprisingly large build, is trading at $1.2629, down 0.3 cents.