Market Eyes Tropical Storms in the Gulf
August 19, 2020
The inventory report from the API had crude oil stocks down 4.3 million barrels. The Reuters estimate for today’s EIA number is that stocks will be down 2.7 million barrels. Crude stocks at Cushing, Ok were down 599,000 barrels. API called gasoline stocks up 5 million barrels compared with today’s estimate for stocks to be down 1.1 million barrels. Distillates on the API report were down 964,000 barrels and the estimates for today is that they will be down 557,000. We will see how the EIA numbers come out this morning and see if the market can get any kind of reaction.
The big build to gas stocks makes traders wonder about demand falling off we will see what the EIA says. This is the second week of a draws to distillates stocks and that gives hope that maybe diesel demand is picking up, but we will look to the EIA numbers for more clarity.
There are currently three tropical disturbances that could develop as the work their way towards the US. Two currently have the possibility of moving into the gulf but we all know it is very hard to predict the track of these storms and how they will develop but we do need to pay attention as this market appears ready for a pop if it gets the right kind of news and a hurricane into the gulf might be what it needs.
Bloomberg reports that “Forces loyal to Libya’s eastern commander Khalifa said oil ports closed since January can reopen. However, it wasn’t clear if crude exports from the OPEC member would be allowed to resume.” Libya is a very fluid place with respect to all this so this could be a very short term situation but for now it gives some hope for more oil coming to the market. My guess is that most traders are taking this with a very big grain of salt.
The Joint Ministerial Monitoring Committee of OPEC+ meets today and that may generate some headlines to add to the market’s intraday volatility.
For today’s propane update the estimates are calling for a build to stocks of 2.31 million barrels and the five year average for this week is a build of 2.639 million barrels.