Much confusion yesterday as traders took in a surprise surge in U.S. crude inventories, which rose by 8 million barrels according to the EIA when a slight 42,000 barrel decrease had been estimated. Despite the massive build, WTI actually gained 51 cents to settle at $53.13, while Dated Brent lost an inconsequential 3 cents to hold at $61.12. The continuing upheaval in Venezuela with the unpopular government on the verge of collapse appears to be part of the inspiration for the resistance in crude values as some point to potential disruptions to U.S. imports of heavy oil used by several refiners including Citgo and Valero.
The resistance to the 4.1 million-barrel build in gasoline inventories to some of the highest stockpiles for this time of year on record did not dent traders enthusiasm either, as gasoline managed a slight increase in value along with diesel which was the only part of the petroleum complex to see a slight 0.6 million barrels draw. Higher fuel imports and a year over year rise in gasoline and diesel demand may have prompted some to ignore the data and look at secondary factors to support prices, despite fundamentals.
For motorists, the days of low prices appear to be ending with a noticeable increase in average prices at the pumps in the past. According to GasBuddy’s Live Ticking Average, pump prices now stand at $2.286 a gallon, up 3.7 cents compared to last week, on par with prices last month, but still 29 cents below the cost to fill up on this day last year. For diesel, the fuel which moves the world, at $2.926 a gallon, prices are the same as last week, but still 10. 3 cents lower than on Christmas Day last month. In contrast to this same day in 2018, diesel is now 2.8 cents a gallon cheaper.
With markets finally considering more sobering data this morning, trades are down across the board with crude down fractionally but gasoline and diesel off a cent a gallon. Barring any major news developments today, the overall petroleum market will record a slight net loss for the day and indeed the week and end a three-week winning streak that saw a rebound in energy prices from their December lows.