Energy Futures Moving Higher
Inventory declines and output cut assurances have energy futures moving higher for a 2nd day, making Monday’s big sell-off seem like a distant memory.
Saudi Arabia’s energy minister affirmed the country’s commitment to rebalancing the market, indirectly countering the US President’s twitter post that sent prices spiraling lower Monday.
The API was reported to show a draw in crude oil stocks of 4.2 million barrels last week, and a decline in gasoline stocks of 3.8 million barrels, while distillates saw a slight increase of 400k. The EIA weekly report is due out at its normal time this morning.
RBOB gasoline futures continue to outperform as a busy refinery maintenance season coupled with numerous unplanned outages outweigh soft demand and ample inventories as the spring RVP transition begins.
As the chart below shows, the spread between March and April RBOB futures is dramatically tighter than it was in the past two years, as multiple PADD 1 refinery issues have started closing the gap between winter and summer grade prices ahead of their normal schedule.
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