Crude prices are down to $48.00 this morning after making slight gains yesterday and opening this morning at $48.36. Crude prices have fallen 41 cents (-.85%) since closing yesterday at $48.41. Crude prices weaken despite the relatively constructive EIA U.S. inventory report published Wednesday.
Refined products strengthened yesterday and this morning following the EIA report. Diesel prices increased slightly, gaining 97 points (-.60%) cents yesterday, and are now at $1.6341. Gasoline performed better than crude or diesel, gaining over 3 cents during yesterday’s trading session, and over 2 cents (1.66%) this morning, bringing prices up to $1.6458 and surpassing diesel prices by over a penny. Tropical Storm Harvey and the EIA report are both components supporting gasoline prices.
The EIA Inventory report was released late yesterday morning. Crude inventories drew for the eighth consecutive week despite lower refinery runs and higher net import. Crude drew 3.3MMbbls last week, bringing inventories well below year-ago levels by 30MMbbls (6.0%). Total crude exports increased moderately while crude imports reached the highest level since April. After two weeks of gains, gasoline drew 1.3MMbbls, while diesel remained unchanged.
Tropical Storm Harvey continues to strengthen as it makes its way to the southern Texas coast. The National Hurricane Center forecasts point to slow movement, increasing chances for heavy rainfall and dangerous flooding. The National Weather Service (NWS) has issued an advisory for Corpus Christi saying that Harvey is forecast to become a hurricane. NWS says that rainfall could possibly total 15 to 20 inches, with as much as 25 inches in isolated amounts. Five refineries in the Corpus Christi area produce 868,000b/d, making up 4.2% of total U.S. capacity. Harvey could become the first hurricane to strike Texas since 2008.