• 4 minutes Projection Of Experts: Oil Prices Expected To Stay Anchored Around $65-70 Through 2023
  • 7 minutes Oil prices forecast
  • 11 minutes Algorithms Taking Over Oil Fields
  • 14 mintues NIGERIAN CRUDE OIL
  • 9 hours How Much Oil Does Aramco Have?
  • 15 hours Spy&State: Huawei Founder Says Firm Does Not Spy For China
  • 1 hour Venezuela continues to sink in misery
  • 4 hours BofA Sees Oil at $35-70
  • 1 hour How Is Greenland Dealing With Climate Change?
  • 57 mins "Peace Agreement" Russia vs Japan: Control Over Islands Not Up For Discussion
  • 4 hours Socialists want to exorcise the O&G demon by 2030
  • 20 hours China's Exports Shrink Most In Two Years, Raising Risks To Global Economy
  • 6 hours China Car Sales Plummet: Can Musk Unshovel His Groundbreaking?
  • 16 hours Oil Slide Worries Traders. *relax* This Should Get Sorted by Year End.
  • 1 day protests in Canada over pipeline
  • 22 hours Bolsonaro Wins in Brazil
  • 50 mins WSJ: Gun Ownership on Rise in Europe After Terror Attacks, Sexual Assaults
  • 1 hour Regular Gas dropped to $2.21 per gallon today
A Drastic Shift In Oil Market Sentiment

A Drastic Shift In Oil Market Sentiment

Sentiment in oil markets has…

Traders Ditch Gasoline Futures, Prices Drop

Gasoline

After the Energy Information Administration reported a surprising 2.1-million-barrel build in gasoline inventories for the week to June 9, traders rushed to offload their bets on gasoline futures, causing a price drop that saw the spread between the front-month Nymex RBOB and WTI narrow from US$19 per barrel at the start of June to US$15.44 a barrel.

S&P Platts noted that analysts it had polled ahead of the release of the weekly report had expected a draw in gasoline inventories of 600,000 barrels. This expectation likely aggravated the sentiment that caused the selloff.

This is the second week in a row of rising gasoline inventories, and the timing had much to do with the market reaction to the reports. Driving season is ahead, and as analyst John Kiduff noted, “Refiners are going to still crank out supply because they're hoping that when schools close people are going to hit the road. That's wishful thinking, but it's what they're going to play for.”

But last year’s driving season was a disappointment in terms of gasoline demand, and there are chances of a repeat this summer. Implied demand for the most popular fuel in America stood at 9.293 million bpd over the first two weeks of June, down from 9.763 million bpd in the previous two weeks. A year earlier, average daily demand was 9.665 million barrels.

Meanwhile, crude oil production is rising. The year-to-date increase for the Lower 48 states has now reached 599,000 bpd, and according to the International Energy Agency, by the end of the year, the U.S. in total will be producing 920,000 bpd more than it did at the end of 2016.

Crude oil prices are now at levels last seen in November 2016, with Brent crude hovering a hair below US$47, and West Texas Intermediate at US$44 and change.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage

Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News