The Market is Rising Despite Turmoil in Washington, D.C.
January 7, 2021
The propane inventory report called total stocks down 2.369 million barrels putting total stocks at 72.777 million barrels versus last year when there were 82.784 million barrels. Midwest stocks were down 1.086 million putting total stocks at 20.380 million barrels and last year there were 19.459 million barrels. Gulf Coast stocks were down 1.539 million barrels and total stocks are at 39.239 million barrels versus last year at 53.299 million.
Crude stocks were down 8.01 million barrels putting total stocks at 485.46 million barrels compared to last year at this time when there were 431.060. Gasoline stocks were up 4.52 million barrels putting total stocks at 241.08 compare with 251.609 last year. Distillate stocks were up 6.39 million barrels putting total stocks at 158.42 million barrels compared to 139.050 million barrels last year. Imports were down 43,000 bpd down 5.368 million barrels and it has been reported that this is the first time since 1986 that we got no import from Saudi Arabia.
The big news of the cut of production by Saudi Arabia which was a surprise to the market is still offering support to the energy markets.
The markets have been on a rise higher as they focus on the vaccine roll out and the outlook for things to be better at some point later this year on many fronts. That outlook still seems firmly in place despite what happened at the Capital yesterday. The market continues to look past the concerning issues and focus on the potential in the future. This outlook will continue until something changes that optimism.
The build in product stocks and the decline in the demand in yesterday’s inventory report were bearish but as mentioned above traders are looking past this and buying on future potential. But I must say that this market has been on a very strong path and is currently overdone on the upside so we must be cautious. This does not mean the market cannot continue higher. Since the November lows crude has gone up roughly $16 dollars, RBOB and ULSD fifty cents per gallon. If the market gets some news that finally give it pause it could offer a corrective move lower but so far that has not happened, even despite yesterday’s news.