Tropical Storm Barry is Giving Market Reason to Trade Higher
July 11th, 2019
The DOE inventory showed a big decline to crude stocks and that set the market off on a big up day. Crude stocks were done 9.50 million barrels way more than any of the estimates. Crude oil stocks at Cushing, Ok were done 310,000 barrels.
Gasoline stocks were down 1.46 million barrels and distillates were up 3.73 million barrels.
The draw to crude and gas along with the threat to the Gulf from Tropical storm Barry gave the market reason to trade higher yesterday and it was a big up day in the energy market. Prices were higher again over night as the new hit that Iran had attempted to block a British oil tanker in the Strait of Hormuz. A British warship that was trailing the tanker raced up to its defense and turned the Iranian vessels away. Nothing other than this happened but as tension are high around Iran any action is seen as very worrisome. Price have eased a bit as the day has progress.
Propane stocks had a surprise draw of 241,000 barrels and the fact that crude oil prices were higher and propane had a draw propane price were up slightly. With total stocks still 13 million more than last year the one week draw is being seen as a one off and the market will be looking for a build again next week.
Fed Chairman Jerome Powell came across as dovish in his remarks yesterday and the indication was that an interest rate cut was still in the cards and the market took that as bullish. Powell will today be in the Senate and unless he tell a very different story today the market will see his outlook as a positive and good for energy demand and supportive of prices.
Tropical storm Barry has shut in approximately 32% of crude oil offshore production and 18% of offshore natural gas production. Workers have been removed from oil offshore platform as a safety precaution is the reason for the shut in production.
The US used an emergency meeting of the UN’s IAEA”s board on Wednesday to increase pressure on Iran over breaches of it nuclear agreement. The US said Iran’s breaches of it nuclear deal are an attempt at extortion, waring Iran that it is isolation itself. The US however said it is open to talks with Iran.