Refined products are selling off for a 5th straight session, and oil prices are following close behind after managing to reverse course in Tuesday’s session to finish the day with gains.
After more than 2 weeks of heavy selling, short term indicators had moved into oversold territory and were begging for a bounce like we saw yesterday afternoon. The question for the rest of the week is whether sellers can gather enough momentum to challenge the longer term chart support just a few percentage points below current values.
While WTI & Brent get most of the attention, Western Canadian oil prices spiked more than $12/barrel this week after Enbridge backpedaled on proposed changes to its pipeline nomination system. With Venezuelan production crumbling, Western Canadian barrels are in high demand among gulf coast refiners as the heavier grade is a better fit for existing plant configurations than the lighter sweeter options being produced in most of the shale plays across the US.
The API was said to show draws in crude oil and diesel stocks of 2 million and 871 thousand barrels respectively last week, while gasoline stocks swelled by more than 3.7 million barrels for the week. The DOE/EIA version of the weekly inventories is due out at 8:30am mountain time today.
The EIA reported this morning that US refiners exported 27% of their total distillate production in 2017, as the US Gulf Coast increased its position as the refined product supplier of the Americas, whether they be north, south or central.
Still no word from the white house on the renewable fuel compromise that’s been rumored for weeks, and was reportedly due to be released on Monday. Other unconfirmed reports suggest that senators from Iowa aren’t happy with the proposal and are saying there’s no deal. Ethanol RINs climbed back above the 20 cent mark on the lack of news yesterday and have spiked to 29 cents this morning.