Oil prices move lower after surprise crude oil build
The main impact of the lifting of the export ban will likely be a reposition of many of the crude oil spreads both domestically in the U.S. and internationally as more U.S. low sulfur crude hits the international market. The light/heavy and low sulfur/high sulfur spreads will likely be the spreads most impacted depending on how much crude oil is actually moved out of the U.S.
Global equities added value across the board ahead of what is likely to be a U.S. Federal Reserve rate hike announcement today. A Reuter’s poll of over 90 economists suggest that there is a 90 % chance the Fed will raise rates today. The EMI Global Equity Index increased by 1.19 % with the year to date loss narrowing to 4.6 %. Six of the ten bourses in the Index remain in negative territory for 2015 with Canada at the bottom of the leader board as this oil dependent economy responds to the very low price of oil. China remains on top of the leader board with a double digit gain. Overall global equities were a positive price directional driver for the oil compels over the last twenty four hours.
The API released their data late Tuesday afternoon showing a surprise build in crude oil stocks with a surprise draw in distillate stock while gasoline inventories were only marginally higher. US crude oil stocks increased by 2.3 million barrels with Cushing inventories increasing by about 0.9 million bbls on the week. The API reported a 0.1 million bbl build in gasoline stocks along with a 1.8 million bbl draw in distillate fuel. Total combined stocks in the API report showed a small increase.
Overall the API data points released were bearish but with the market mixed in early morning trading and ahead of Wednesday’s (10:30am EST) EIA data release. Finally the EIA Nat Gas inventory report will be released on Thursday at10:30 AM EST. Finally the EIA Nat Gas inventory report will be released early on Thursday at 10:30am EST.