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Oil Slightly Higher After Weekly US Inventory Report

May 18, 2016 at 19:02 by Andriy Moraru

The US Energy Information Administration released its weekly petroleum status report today. Crude oil inventories rose by 1.31 million barrels, gasoline fell by 2.50 million barrels, and distillates, including heating oil, fell by 3.17 million barrels.

Analysts expected oil inventories to have fallen by 3.5 million barrels, however, because refined product inventories fell by greater margins, the affect on prices was supportive.  June WTI on the CME was trading at $48.57 prior to the report and $48.77 shortly afterward. In part, prices rose because geopolitical factors, including supply disruptions due to the fires in Fort McMurray Alberta, remain more dominant factors than this data.

Gasoline inventories were expected to fall by 1.25 million barrels so the greater drawdown was supportive, though the price of June RBOB gasoline on the CME was little changed from $1.645 shortly before the report to $1.6403 afterward. Gasoline prices have already seen a sustained run up toward the typical rise in demand during the US summer season, not to mention the general uptrend in energy prices.

Distillate inventories were seen lower by 1 million barrels, and the actual was much higher, so June heating oil on the CME rose from $1.4779 prior to the report to $1.4821 afterward. While the inventory draw was much more significant than expected, heating oil typically sees seasonal weakness with the decline from winter heating demand so the increase of only a penny or so is not too surprising in this context.

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