WTI has reached its highest level in 3 years overnight, adding another dollar per barrel after punching through resistance at the May 2015 high of $62.58 during yesterday’s session. The overnight high of $63.67 was aided by an 11 million barrel draw in US crude inventories that the API was said to report in its weekly report.
Refined products are somewhat reluctantly following crude higher this morning after a rash of refinery issues sent gasoline prices spiking to their highest levels since Hurricane Harvey in Tuesday’s session. The API report had 4 million barrel builds in both gasoline and diesel inventories as refiners continued to ramp up production.
The butane pipeline leak near the Irving refinery in St. John New Brunswick was said to not cause any immediate issues at the refinery, but it could threaten production if the situation wasn’t resolved soon.
The EIA released its monthly Short Term Energy Outlook yesterday, predicting that Brent and WTI will average roughly $5-6/barrel less than where they’re currently trading for 2018 as global supplies increase after declining in 2017. The report also noted that retail gasoline prices average 22 cents more now than they did this time last year, which sets up an interesting test for the year between the tax law just passed by congress vs. the fastest acting consumer tax for control of the American pocketbook.
Last week’s DOE report showed large declines in gasoline and diesel demand estimates in the last full week of 2017. This week expectations are that we should see a spike in diesel demand as heating oil was called on to supplement supplies during the cold snap, while gasoline demand should continue its pattern of a dismal start to the year as drivers avoided the roads wherever possible. The weekly report returns to its regular schedule today and is due out at 9:30 central.