RBOB soared on rumors that a Canadian refiner was in the cash market buying product. Sure enough our refining nightmare continues. That makes three refineries that serve the New York Harbor market have units shut or slowed.
A wildly bullish American Petroleum Institute report and reports of refinery issues as well as a blowout had crude go crazy late in the day. The bulls have gripped control as the market has gone out of control.
A much larger than expected decline in crude oil as reported by the API last night coupled with the growing unrest in Egypt has pushed the spot WTI price back above the $100/bbl level for first time since September 2012.
The overall fundamental picture has not changed this week with oil stocks in the U.S. at the highest level in more than 25 years. Simply put, oil is well supplied with supply still outstripping demand.
Oil prices have continued to move higher in anticipation of a friendly outcome to today’s U.S. FOMC meeting. The market has been trading this week on a view that the Fed will remain status quo on its QE.
Oil prices are steady as we await confirmation from the EIA of a massive build in supplies. The IEA also just released their monthly oil market assessment and also lowered global oil consumption slightly for 2013.
So the battle between a weakening oil demand picture versus the support coming from the very accommodative monetary policies in the developed world economies continues with the winning side flip flopping back and forth.