Recap: Oil markets were all in positive trading territory yesterday, until the EIA's weekly DOE Inventory Report (for the week ending June 13, 2014) revealed that commercial crude stocks declined less than anticipated at .6 MMbs and helped move the NYMEX (WTI) Crude contract lower. NYMEX Crude settled down 39 cents, while ICE Brent moved higher, crossing the $114 level on more Iraqi/ISIS violence now including attacks on a northern Iraqi refinery producing the bulk of refined products for Iraqi domestic consumption. ICE Brent moved up 81 cents to $114.26, and once again with Brent moving higher and WTI moving lower (3rd trading day in a row), the Brent-WTI spread widened to $8.29. Although DOE data revealed a slight build in distillate stocks of .4 MMbs and was within expectations, NYMEX ULSD (HO) still moved higher as it seems to be following Brent crude higher. NYMEX ULSD settled higher by 2.21 cents to $3.0401, moving up through two daily resistance points. NYMEX RBOB moved higher as well and traded in a narrow 2.5 cent range before settling up 71 points to $3.0982 as DOE data revealed a .8 MMb build on a Bloomberg expectation of a .55 MMb decline.
Currently, oil markets are up except the July NYMEX Crude contract (expiring tomorrow) supported with headlines like this AP morning headline, "Militants fly their black flags over Iraq refinery." (6-19-14) NYMEX ULSD is up 41 points to $3.0442, NYMEX RBOB is up 1.43 cents to $3.1125, ICE Brent is up 37 cents to $114.63, but July NYMEX Crude is down 11 cents to $105.88.
*Total refinery % operable utilization dropped .8 percentage points to 87.1% on unplanned outages. This is lower than last year at 89.3% and 91.9% in 2012. The PADD 1 (East Coast) rate was at a strong 93.7%, up .4 percentage points to 93.3%.
*East Coast (PADD 1) distillate stocks are down 7.6% from last year and 22% below the 5 year average. New England (PADD 1A) distillate stocks are 20.8% lower than last year, and 47% below the 5 year average. Central (including NY-PADD 1B) distillate stocks are 4.4% lower than last year and 25% below the 5 year average.
*East Coast (PADD 1) gasoline stocks are .2% lower than last year, and 5.7% above the 5 year average.
*Cushing, OK crude stocks increased (.247 MMbs) for the first time after 9 consecutive weeks of declines and currently are at 21.4 MMbs, still 56% lower than last year, but above the 20 MMb psychological mark.
*North Dakota oil production surpassed the 1 MMb per day level in April.
Headlines other than Iraq:
*The Federal Reserve announced yesterday afternoon that it will continue to taper by cutting another $10 Billion from its monthly bond purchases. Additionally, "the Fed barely increased its estimate of inflation despite signs that consumer price increases are picking up. Its benign inflation outlook suggests that the Fed doesn't feel rising pressure to raise short-term interest rates." (AP 6-18-14) Following the announcement, U.S. equity markets increased for the fourth day in a row.
*The U.S. Senate Committee on Energy and Natural Resources passed a Keystone XL pipeline bill yesterday 12 to 10 "to approve the construction of the Keystone XL pipeline without a Presidential permit." Chairwoman Senator Mary Landrieu (D-La) will push for a vote on the Senate floor and commented, "Two events in the last 24 hours underscore clearly why today's vote to approve the Keystone Pipeline was important. The Canadian government has conditionally approved the 730 mile Enbridge's Northern Gateway Pipeline to send oil sands to the West Coast of Canada instead of the Gulf Coast. And, yesterday, al-Qaeda affiliated militants attacked the largest oil refinery in Iraq....." (AP 6-18-14)
*A bipartisan plan to raise the federal gasoline and diesel taxes to help bolster the Federal Highway Trust Fund in order to improve an aging infrastructure. The plan would raise the gas and diesel tax by 12 cents each: the gas tax would move fro the current18.4 cents per gallon, and diesel tax from the current 24.4 cents. (AP 6-18-14) Click here to view today's Refined Products MarketWatch.