Gasoline demand was one of the culprits in yesterday’s crude oil demise as demand slipped, causing problems for the Fed as Fed Chair Janet Yellen says all the pieces are in place for inflation. Yet, the weakness in gasoline demand and economic data may suggest that we may be seeing some underlying softness in the economy. Now you might not think that if you look at the jobs reports and the help wanted ads but in general, the gasoline demand numbers don’t jive with a booming economy.
It was an active night for global markets, including a terror attack in Iran, the takeover of Banco Popular in Spain--not to mention the American Petroleum Institute Report that showed a big drop in crude supply but big increases in gasoline and distillates.
When will the global oil market get in balance? It already has and according to the International Energy Agency, that process is accelerating. The global oil market has achieved so-called market balance but much work remains to reduce excess global oil supply.
Can OPEC find love and happiness and balance in a world full of shale? The OPEC report is out. OPEC is getting ready to double down on production cuts as they raise their forecast for U.S. shale oil output. This is unprecedented for the cartel to not only comply with cuts but maybe extend them as U.S. shale producers continue to increase oil output.
And they're off! Crude oil prices are trying to recover after the American Petroleum institute (API) reported a significant 5.79 million-barrel drop in U.S. crude oil supply--the biggest draw since December 2016. This comes after a reported a 4.2 million-barrel drop a week ago.