Who said it was refiner maintenance season? It sure does not feel like it. Once again U.S. refiners defied expectations raising runs a full percentage point to a summer-like 91.4%, according to the Energy Information Administration. The refining madness put U.S. crude oil refinery inputs at 16.4 million barrels per day which played a large part in the market getting a shock with a whopping 4.9-million-barrel crude oil draw. It isn’t July yet, is it?
Crude oil prices are going out like a lamb this March as hedge funds look to book profits from their largest net long position since May 2015. Hedge funds like to book profits at the end of the month because they get paid on the profits they made during the month, not to mention the first quarter of 2016, which ends today.
Fed Chair Janet Yellen became a friend to the commodity markets as she was just dovish enough to inspire a rally. Her comment yesterday that central bankers will “proceed cautiously” in raising interest rates because the global economy presents heightened risks was enough to get the complex going. After Yellen spoke, the dollar fell, the euro rose and commodities like gold and silver started to rise. Crude oil, of course, was a little reluctant because of fears of the ongoing oil glut, but the American Petroleum Institute (API) supply report was not as bad as feared.
A terror attack in Brussels may slow momentum for crude oil as there could be a backlash on the demand side. As details are filtering in about another terror attack, crude oil traders may pull back if they fear that this incident with cause a drop in demand.