Fed Chair Powell Testifies Before Congress
June 17, 2020
The API inventory report yesterday afternoon called crude up 3.9 million barrels with Cushing down 3.3 million barrels. Gasoline stock were up 4.3 million barrels and distillates were up 919,000. The market should trade on the DOE inventory report today. The products seem to be the focus as crude has lost its luster and is likely topped out at $40 but RBOB and ULSD may have some more upside if the inventory report is supportive.
The average estimates for the today’s DOE inventory report from the Bloomberg survey is for crude oil supplies to be up 2.069 million barrels. Gasoline supplies are called down 1.024 million barrels and distillates are called up 1.930 million barrels.
The Reuters survey is calling for crude to be down 152,000 barrels, gasoline down 17,000 barrels and distillates are estimated to be up 2.4.
Beijing has had a new round of coronavirus outbreaks and has clamped down to try and reduce the spread. Bloomberg reports that there are 137 new cases. Most schools were closed yesterday and more have been added, and they have also cancelled hundreds of flights.
Bloomberg has reported that coronavirus cases in South America and Brazil posting new records.
Federal Chairman Jerome Powell testified to Congress yesterday and will be back again today. He has offered a cautious outlook or the US economy, saying that even if there is a substantial improvement in employment the labor market could still be left “well short” of the pre pandemic levels.
Caution about a second wave of the virus versus the good economic data as we emerge from lockdowns is what the market is trying to figure out. Has the recent positive data and good recovery from the lock downs been the result the stimulus measures or other factors. Another wave of the virus is a risk to the energy markets.