The oil complex is mixed this morning as the market deciphers various OPEC related headlines. Crude traded lower yesterday, despite a supportive API report. This morning, crude has recovered most of yesterday’s losses and is trading up 73 cents at $65.80 currently.
Fuel prices are moving opposite of crude this morning after the API reported inventory builds for both products. Diesel and gasoline prices traded lower yesterday, both losing over a penny. Prices are trading mostly flat this morning with diesel trading at $2.1213 and gasoline at $2.0308 currently.
The API report showed mixed inventory results this week. Crude drew by 3 MMbbls exceeding the markets expectation of a 1.9 MMbbls draw. Gasoline and diesel were more bearish, building by 2.1 MMbbls and .8 MMbbls respectively. Last week, EIA data contradicted the API reporting large draws versus API’s builds. The market is looking to today’s EIA report for fundamental support this morning.
OPEC Headlines Emerge from Vienna
The market is absorbed with OPEC headlines just two days ahead of the June 22 meeting in Vienna. Saudi Arabia and Russia continue to push their agenda for increased production while other OPEC member countries are resistant. Iran has mentioned the idea of returning to 100% compliance, down from the current levels of 145%, as a compromise. However they have also made it clear an agreement may not be reached, which could have a bearish impact on the market. Expect headlines to continue to drive the market leading up to the meeting on Friday.
That’s exactly what Congress is proposing. This isn’t the first time – the No Oil Producing and Exporting Cartels Act (which conveniently spells out NOPEC) has been resurrected once again, after failing under the Bush and Obama administrations. The Act allows the U.S. to sue OPEC under the Sherman Antitrust Law. While previous presidents have vetoed the bill, there’s a strong possibility that Trump could sign the legislation. While OPEC nations are sovereign and are not subject to American lawsuits, a guilty verdict could be accompanied by trade sanctions or tariffs. Click Here to read more from World Oil.