Oil Prices Hit Highest Level In Over Two Years
Energy futures are off to a slow start this morning with each of the main benchmarks trading just on the green side of unchanged. The bulls are likely taking a breather after pushing oil prices to their highest level in over two years yesterday. Credit for this week’s rally is being placed in multiple places from demand optimism and OPEC projections to technical trading play.
As if scared to not be in the news, Iran reported a fire has broken out at its 220,000 bpd Tondgooyan refinery yesterday, located just south of Tehran. American and European crude oil futures seem apathetic trading just .15% higher this morning as efforts to extinguish the fire have extended into today.
The American Petroleum Institute’s estimate of a ~5.5 million barrel draw in American crude oil inventories surely isn’t hurting the bullish case for higher prices. The API also reported a build in gas and diesel stocks last week of 2.5 million barrels and 1.6 million barrels respectively. The Department of Energy will weigh in on the matter this morning at 10 a.m. CDT.
The EIA published an article yesterday looking back at the furious rally in RIN prices over the past few months, leading the price of compliance to all-time highs. The Administration highlighted that while rising RFS targets may pump RIN prices higher, the year-long rally in biofuel feedstock (corn and soybeans/soy oil) are the main drivers right now.