Gas And Diesel Benchmarks Set New 7-Year Highs
Gas and diesel benchmarks set new 7-year highs in the overnight trading session with drawdowns in the refined product inventory estimates by the API is taking credit for the early morning buying. The Institute is showing a drop of 4.6 million barrels of national gasoline stocks, 2.3 million barrels for diesel, and a build of 5.2 million barrels of WTI crude oil. Interestingly enough, it’s crude oil futures that are leading the way higher this morning, despite the seemingly bearish inventory data. WTI and Brent are both tacking on over 1% in gains this morning, followed closely by refined product futures adding .8% so far today.
The EIA published their Short Term Energy Outlook around noon Wednesday. The monthly report, along with an accompanying article, highlighted the expectation of increased spending on home heating this winter due to elevated natural gas and heating oil prices in conjunction with colder-than-usual temperatures. The report also expects crude oil prices to drift lower through 2022, but the only range they can give with 95% confidence is that future prices will be somewhere between $40 and $140.
It’s not over but it’s looking good: the only tropical activity in the Atlantic Ocean is a small system given a 10% chance of development and heading out to no man’s land. While we may be past the peak of hurricane season, latecomers are still a possibility (i.e. Hurricane Sandy).
The Department of Energy’s weekly report is due out at 10am Central Time this morning. The last of the myriad fundamental reports to be released this week, the inventory levels published could put a punctuation mark on this week’s buying and carry further gains into the end of the week or dispel the API’s estimates and throw some cold water on this overcooked rally.