Fed Ponders Rate Hike in 2023
June 17, 2021
Crude oil prices closed slightly higher while refined fuels product prices closed slightly lower for the nearby futures month in yesterday’s trading. This has again compressed the ULSD and RBOB crack spreads. Prices rose after the DOE reported a big drop in total US crude oil stocks and large increases in implied demand for gasoline and distillates.
The Federal Reserve said it may raise interest rates sooner than expected and estimates 2 interest rate hikes in 2023. With this news, the US dollar index rose by 1%, which put selling pressure on crude oil prices late in yesterday’s trading session.
The DOE reported a total US crude oil stocks fell by 7.4 million barrels, which was double the markets expectations. Crude stocks at Cushing where WTI crude oil is priced, fell by 2.1 million barrels which was also supportive to prices. Also supportive to crude prices was the jump in refinery utilization up 1.3% to a total of 92.6% of capacity.
The DOE inventory report called crude oil stocks down 7.36 million barrels to a total of 466.674 and last year at this time there were 539.280 million barrels.
Cushing crude stocks were down 2.150 million barrels to a total of 43.554 million and last year there were 46.836 million barrels.
Gasoline stocks were up 1.95 million barrels putting total stocks at 242.980 million barrels and last year at this time there were 256.995 million barrels. Implied demand for as was up 759,000 bpd to a total so 10.195 million bpd.
Distillates stocks were down 1.02 million barrels putting total stocks at 136.191 million barrels and last year there were 174.471 million barrels. Implied demand for distillates was up 1.096 million bpd to a total of 5.056 million bpd.
Propane stocks were up 1.544 million barrels putting total stocks at 55.194 million barrels and last year at this time there were 68.967 million barrels. The Midwest stocks were up 1.126 million barrels outing total stock at 14.655 million barrels and last year there were 16.356 million barrels. Gulf Coast stocks were down 215,000 barrels putting total stocks at 31.448 million barrels and last year at this time there were 42.392 million barrels.