Oil caught between Iran and Greece price-drivers

Global equity markets shrugged off the Greek saga and were able to minimize their losses on the day as shown in the EMI Global Equity Index table below. The EMI Index was slightly higher over the last 24 hours maintaining a week to data gain of 1.7%. On the year the Index is higher by 11.6% with Germany and Hong Kong holding the top two spots in the Index. Global equities have been a supportive price driver for oil prices as well as the broader commodity complex.

The API report showed a larger than expected build in a crude oil stocks along with a larger than expected build in gasoline stocks. The API reported a large build (of about 2.9 million barrels) in crude oil stocks versus an expectation for a modest build in crude oil inventories as crude oil imports increased and refinery run rates decreased by 0.2%. The API reported a large build in gasoline stocks and a larger than expected draw in distillate stocks versus an expectation for a modest draw in inventories.

The report is mixed-to-bearish for crude oil and gasoline, and bullish for distillate. That said, it is difficult to differentiate whether the changes overnight were from the inventory report (I doubt it) or from the movement of the macro indicators and the evolving geopolitics of the Mideast region. The market remains hostage to the evolving situation in Europe that has been unfolding along with the geopolitics of the mid-east this week as discussed above with inventory data a secondary driver. The API reported a build of about 2.9 million barrels of crude oil with a 2.0 million barrel build in Cushing and a build of about 0.7 million barrels in PADD 2 which is bullish for the Brent/WTI spread. On the week gasoline stocks built by about 1.8 million barrels while distillate fuel stocks decreased by about 2.2 million barrels. The EIA data will hit the media airwaves at 10:30 AM EST today. Whether or not the market will react to anything that comes out of the EIA this morning will be dependent on what revolves around Europe today.

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