Choppy Action Continues for Energy Markets
The choppy action continues for energy markets as a failed Tuesday rally turned into a round of modest Wednesday selling. A build in crude oil inventories and some new pessimism over Brexit and the trade wars are all getting credit for the early round of selling, although none of that changes thus far are threatening the recent trading range.
Prices did briefly spike in Tuesday’s session, following a Reuters report that said OPEC was considering further output cuts. A couple of hours later, once people or their trading algorithms were able to read past the first paragraph of that article, the market gave up all of its gains as it was clear that Saudi Arabia was not yet in favor of more cuts.
The API was said to report a 4.4 million barrel build in crude oil inventories last week, while refined products saw declines of 3.5 million barrels of diesel and 700k barrels of gasoline. The EIA report is due out at its normal time this morning.
California gasoline prices have now made national news after the governor called for an investigation into why the state’s retail price spike. Nice timing on that request as prices have now dropped by more than $1/gallon in October as the seasonal RVP transition, refinery repairs, and more imports combine to heal the recent supply shortage.
Maybe this should have been the OPEC headline… (See picture 3)
Saudi Arabia, OPEC’s de facto leader, wants to focus first on boosting adherence to the group’s production-reduction pact with Russia and other non-members, an alliance known as OPEC+, before committing to more cuts, the sources said.