Global equity markets were relatively flat over the last 24 hours. The EMI Global Equity Index was about unchanged but is still higher by 1 percent for the week to date. The year to data loss remains at 5.1% with seven of the ten bourses in the Index still in positive territory. The next move in most equity markets will be driven by the outcome of Mr. Bernanke’s testimony over the next two days. Over the last 24 hours global equities have been a neutral price driver for the oil complex and the broader commodity markets.
Wednesday's API report was mixed with a draw in crude oil inventories and builds in both gasoline and distillate fuel. Total crude oil stocks decreased greater than the expectations by 2.5 million barrels even as crude oil imports increased strongly while refinery run rates increased by 0.4%. The API reported a build in both distillate fuel inventories and in gasoline stocks.
The entire oil complex is lower as of this writing and heading into the EIA oil inventory report to be released at 10:30 AM EST today. The market is usually cautious on trading on the API report and prefers to wait for the more widely watched EIA report due out this morning. On the week gasoline stocks increased by about 2.6 million barrels while distillate fuel stocks increased by about 3.8 million barrels.
The API reported Cushing crude oil stocks decreased marginally by 88,000 barrels. The API and EIA have been very much in sync on Cushing crude oil stocks and as such we should see a similar draw in Cushing in the EIA report. Directionally it is neutral for the spread.
My projections for this week’s inventory report are summarized in the above table. I am expecting another modest draw in crude oil inventories, a draw in gasoline and a build in distillate fuel stocks.