Weekly EIA: Yesterday, the U.S. Energy Information Administration (EIA) provided weekly data and it showed crude inventories were off by 1 million barrels (to 411.7 million barrels) which is a 9th consecutive weekly draw and is also lowest level since March 2022. As part of this crude reduction, the Cushing, Oklahoma delivery hub fell by 148,000 barrels bringing level to 20.7 million barrels which is nearing operational minimums. Gasoline inventories moved inline with analyst forecasts as they showed an increase of 2.3 million barrels on the week and have risen by over 30 million barrels since the end of November. Distillates had an expected small build (of 300,000 barrels) but instead did fall by 3.1 million barrels with inventory now sitting at 128.9 million barrels.
Saudi Arabia: On Wednesday, President Trump met with Saudi Arabian Crown Prince Mohammed bin Salman as they discussed what was deemed the kingdom’s “international economic ambitions” along with trade issues. After this gathering, the Saudi State news agency indicated that they were seeking to put $600 billion into expanded trade and investment with the U.S. over the next four years. Mr. Trump responded yesterday with a request for that investment to be $1 trillion. Plus, he was looking for them to work with OPEC+ to bring down oil prices as that would be quite helpful in ending Russia’s war in Ukraine. OPEC has not yet commented on the request but Saudi Arabia’s Economy Minister Faisel al-Ibrahim has pointed to the group’s position as already taking steps, including raising output from April 2025 (after several delays in hikes considering demand), for long-term market stability.
U.S. refining : Pe rthe U.S. Energy Information Administration (EIA) yesterday, in the week ending January 17, refinery crude run activity saw its largest weekly decline since January 2024. Those refinery crude runs fell by 1.1 million barrels per day (bpd) as utilization rates were off by 5.8 percentage points and calculated to 85.9%. In addition to some challenges presented by cold weather, Gulf Coast refiners are moving into maintenance season which were key reasons for the big drop in refining activity. These lower rates are likely to continue for the next month or more.
Market Overview: This morning, West Texas Intermediate (WTI) crude is showing small increases as it strives to break a 5-session streak of lower settles. The products are mixed with RBOB gasoline off slightly and ULSD distillates up around $0.03 after yesterday’s surprise draw. The market continues to interpret the flurry of activity coming from the Trump Administration in its initial days with performance showing downward movement across the board from a weekly perspective.
WTI crude (daily):
For the first time since mid-August, West Texas Intermediate (WTI) crude was able to get above $80 for a couple sessions last week. Since then, it has seen five consecutive sessions of lower settlements despite U.S. crude inventory seeing another drawdown on the week and at lowest levels in nearly 3 years. President Trump, speaking at the World Economic Forum, asked OPEC to bring down oil prices as look to end the Russia/Ukraine war. Today, there is small gains early but is trading below the 200 Day Moving Average (DMA) of $75.06 and it is certainly not yet convincing that the losing streak will end this week.
The WTI crude contract was able to break streak (barely) of five consecutive sessions being lower as showed a very small gain of $0.04 (to $74.66) on the day. Yet, for the week, WTI crude was off more the $3.00. The week's action was dominated by inauguration of Donald Trump and subsequent brisk action from the new administration that included a demand of OPEC to lower crude prices while also announcing plans to boost U.S. production. Products were also down on the week but mixed during today's action as ULSD distillates gained $0.0447 (to $2.5162) while RBOB gasoline did fall $0.0166 (to $2.0490).
