Oil Futures Lead The Way Higher Yesterday
Oil futures lead the way higher yesterday posting a $2/bbl gain on the day after the Department of Energy’s weekly inventory report confirmed a ~5 million barrel draw in national crude oil stockpiles. Gasoline and diesel, showing to have built inventory levels last week, pulled back slightly from earlier highs and ended the day with gains of about 3.5 cents, or $1.5/bbl.
Eyes now turn to Vienna where OPEC and friends are expected to announce a continuation of current supply cuts, scheduled to expire this March, if not dial back production even more. It seems the deal hinges on Russia’s agreement, who has yet to indicate one way or another ahead of the meeting. It seems futures are in wait-and-see mode, coming off slightly after overnight buying looked to continue yesterday’s rally.
The EIA published an interesting note yesterday showing as of September, the US is a net exporter for total petroleum products for the first time in the Agency’s history. The article highlights increased domestic crude oil production (leading to decreased imports) and crude oil exports (which have set a new seasonal high almost every week this year) as the main drivers for the paradigm shift.