Latest Market Commentary

November 15, 2018

API report had crude up 8.8 million barrels, gasoline stocks up 188,000 and distillates down 3.2 million barrels. The crude oil stocks at Cushing were up 726,000 barrels.

The estimates for today DOE numbers from Bloomberg are crude up 2.9 million and Reuters is looking for a 3.2 build to stocks. On gasoline Bloomberg is calling for an 800,000 barrel decline and on distillate Bloomberg is looking for a 1.7 million barrel decline.

Inventories will be watched this morning but it would take a pretty surprising bullish report to change the current bearish sentiment.

Yesterday after the big sell off there was some buying and prices did rally but the bulls have not done enough to change the trend. There will still be selling pressure or at least this market could congest here in this area for a bit. Crude was able to settle higher yesterday and break the 12 day losing streak.

Diesel has been lagging behind in it move lower compared to crude and gasoline. This could allow diesel to have more room to move lower to “catch up “with the other markets. The current correction and if diesel should make that move to catch up, should have you getting an idea where forward contract prices are currently. Prices are much improved from just a few weeks ago. This correction is a good place to take a look at prices and consider a layer of protection. Please remember that this market has risk and they can be volatile as we have seen in the last few days and as a result of those risk forward contract prices are “normally” always higher than today because of the unknown. The Maximum Price Contract is always a good alternative if you want to begin your buying but are still concerned that more downside could be ahead.

Tim Danze, MFA Oil Company Hedging Manager