Fed Cuts Interest Rate, Markets Move Lower
August 1st, 2019
Propane stocks built 1.399 million barrels right on the industry estimates for a 1.4 million barrel build. The five year average for this reporting week of the year is 1.827 million barrels so below that average. Total propane inventories now sit at 80.451 million barrels 14.175 million more barrels than last year at this time. Gulf Coast inventories increase 140,000 barrels and total stocks are 47.139 million barrels 12.308 million more barrels than last year at this time. The Midwest stocks increased 675,000 barrels and total stocks are at 24.053 million barrels 1.111 million more than last year at this time.
The Fed cut interest rates but 25 points as expected and the stocks market and energy prices moved lower after the decision and Fed Chairman Jerome Powell’s press conference. Chairman Powell did not commit to making any additional interest rate cuts beyond the one just made and the market was not happy about that which is a big reason from the selling. Energy price are trading lower today in what is most likely some profit taking on the Fed actually decision.
In the DOE inventory report crude stocks were down 8.50 million barrels putting total stocks at 436.55 million barrels. Crude stocks at Cushing, Ok were done 1.533 million barrels. Gasoline stocks were done 1.79 million barrels putting total stocks at 230.74 million barrels. Distillate stocks were done 890,000 barrels putting total stocks at 135.92 million barrels. Overall the report was bullish as total stocks fell 10 million barrels.
Germany’s Vice Chancellor and Finance Minister, Olaf Scholz, said he was very skeptical about a request by the US to join a military mission for the Strait of Hormuz.
Reuters reported that OPEC oil output reached an eight-year low in July as a further voluntary cut by Saudi Arabia deepened losses caused by US sanctions on Iran and outages elsewhere. The 14 members of OPEC produced 29.42 million bpd in July, down 280,000 bpd from June’s revised level and lowest OPEC total since 2011. In July, the 11 OPEC producers bound by the output cut agreement, achieved 163% of pledged cuts. Saudi Arabia produced 9.65 million bpd in July, compared with a quota of 10.311 million bpd. Iran’s crude exports fell to as little as 100,000 bpd in July. In Venezuela, output fell slightly due to the impact of a power blackout, US sanctions imposed on PDVSA and a long-term decline in production. Libya’s production fell due to a stoppage at the Sharara oilfield.