Fuel Price Index [04.25.2018]D.O.E. Report: CL stocks up 2.17 mmbls., Distillate stocks down 2.61 mmbls., Gasoline stocks up .84 mmbls., Refinery utilization down 1.6% to 90.8%.
Crude exports were at a new high last week, but the inventory report came in around what was estimated – so we the increase in domestic production outweighed the increase in exports.
Crude was lower earlier today, and has rebounded to around the levels of yesterday’s close. Distillates came in with a bigger draw than expected and gasoline had a larger build. The drop in refinery utilization likely helped with the crude build.
At this point, as we exit the (all in all) very nice winter, all eyes are focused where they have been for the last 18-months: On the White House. A decision regarding Iran is due over the next 2-1/2 weeks, and the markets will likely show upticks in volatility, though the direction of prices is anyone’s guess. You NEED to hedge, but the costs might go up a bit in order to do so. One scary comment (in consideration of the “cheap” Permian crude) came from BMI – U.S. Will face a distillate shortfall later in this year if wide discounts of light crude continues…”
Jim Slattery, President