Gasoline versus oil supply is one reason the petroleum markets are struggling. A full gasoline tank, as far as supply goes, is overshadowing the big crude oil supply draw. Oil prices are under pressure after the American Petroleum Institute (API) showed a surprisingly large 4.19-million-barrel increase in gasoline supply. The build in supply is rising concern that recent strong almost record gasoline demand may be cooling off. Still, a large drop in overall crude supply is lending support. The API reported a big 4.079 million barrels drop in crude supply that would normally offset the gas number which should, at this time of year, build in Cushing Oklahoma, the WTI delivery point increased by a whopping 2.084 million barrels. The mixed signals are keeping the traders on guard. Future pressure on oil is being felt as Libya’s Sharara oilfield restarted on Wednesday after being shut Sunday that was producing about 220,000 barrels of light sweet crude.
Yet a drop-in distillate supply of 584,000 barrels still shows that refiners will have to do more to build those supplies before winter. As refiner’s max out diesel, we may see less gasoline produced. Product production numbers will be viewed closely in today’s Energy Information Administration (EIA) report.
Traders will also look to the EIA for oil production numbers that have been coming under great scrutiny by some market players. The EIA reports U.S. production at 9.55 million barrels a day, that was less than they previously forecasted and still too high according to some shale producers. As reported previously, by Bloomberg and Fox Business Network, Harold Hamm the chairman of Continental Resources Inc, says that the EIA forecasts on oil production are wrong and adversely impacting the price of oil. Hamm says the EIA prediction of more than 1 million new barrels a day in U.S. production, is wrong and is distorting global oil prices. He says that U.S.production will only rise half of what they have been projecting. Hamm says that “When we’re lagging the Brent world price by $6 a barrel, that’s not putting America first, that’s putting America last.