Market Reacts to U.S. Inventory and Demand Data
Crude oil and RBOB futures contract prices experienced significant movement in the market on Wednesday afternoon following the release of two weeks’ worth of U.S. inventory and demand data earlier in the day.
ULSD Contracts Show Gains
ULSD contracts have been steadily climbing throughout the morning, demonstrating positive growth. The December contract, at about 12:10 p.m. ET, was up 3.12cts, reaching $2.8683/gal. However, more attention is focused on the next-month contract, as January prices rose 2.09cts to $2.8722/gal.
RBOB Contracts Remain in Negative Territory
While RBOB contracts have managed to rebound from earlier lows, they still remain in negative territory. The December contract fell as low as $2.1663/gal but is currently 1.73cts in the red at $2.2055/gal. Additionally, January prices dropped 1.53cts to $2.1853/gal.
Crude Prices Show Minimal Impact
Interestingly, the U.S. Energy Information Administration (EIA) data release had little impact on crude oil prices. The December contract fell by 91cts to $77.35/bbl, approximately 8cts/bbl below its pre-data release level. Similarly, the January contract experienced a decrease of 75cts, now standing at $77.42/bbl. On the other hand, January Brent crude dropped by 68cts to $81.79/bbl, while February prices lowered by 60cts to $81.61/bbl.
Weekly Petroleum Report Delayed Due to System Upgrade
The Energy Information Administration (EIA) normally provides weekly reports on petroleum supply, demand, and inventory. However, last week’s data was delayed due to a system upgrade. The report, released on Wednesday morning, revealed some significant changes in the U.S. crude market.
Crude Inventories and Fuel Supplies
Over the past two weeks, U.S. crude inventories experienced a substantial increase of 18 million barrels (bbl). On the other hand, distillate supplies dropped by approximately 4.7 million bbl. Similarly, gasoline supplies fell by 7.93 million bbl.
Refinery Utilization and Fuel Demand
The EIA reported that U.S. refinery utilization currently stands at 86.1%, reflecting ongoing seasonal maintenance work. Gasoline demand last week, measured as products supplied, remained strong at 8.949 million barrels per day (b/d). In comparison, the previous week saw a robust demand of 9.49 million b/d.
Spot Market Prices
Gasoline and diesel prices in spot markets across the country generally mirrored the movement in futures contracts. However, in Chicago, there has been a recent cycle shift leading to a significant drop of over 11 cents per gallon (gal) for gas and 6 cents per gallon (gal) for diesel.