Prices rose due to increasing concern over falling Venezuelan exports

Recap: WTI rose from its lowest level in a month, shrugging off Wednesday’s EIA report, which reflected a 2.07 build in U.S. crude oil inventories. Prices rose on increasing concern over falling Venezuelan exports and pending US sanctions on Iran. After pivoting around $65.00 a barrel in overnight trading, July WTI broke to the upside, but stopped short of $66.30, the 10-day moving average. This spot contract settled at $65.95 a barrel, up $1.22, or 1.88%.  August Brent rose above $77 a barrel, to settle at $77.32, up $1.96, or 2.60%.

July RBOB rose 4.48 cents, or 2.2%, to $2.1148 a gallon, its largest daily percentage increase since May 9, while July heating oil   added 5.33 cents, or 2.5%, to $2.1799 a gallon.

Fundamental News:  Algeria’s Energy Minister, Mustapha Guitouni, said OPEC and non-OPEC producers will focus on measures to balance the oil market at their meeting later this month. 

According to OPEC’s Annual Statistical Bulletin 2018, the value of OPEC members’ petroleum exports increased by 28% in 2017.  Exports from OPEC increased in value to $578.3 billion last year from $451.8 billion in 2016.  In its report, OPEC updated its oil output target to include its newest member, Equatorial Guinea.  It lists Equatorial Guinea’s production allocation as 178,000 bpd, which brings the overall target for the 12 OPEC members participating in the output cut agreement to 29.982 million bpd. 

Venezuela is nearly a month behind delivering crude to customers from its main oil export terminals, according to shipping data.  Tankers waiting to load more than 24 million barrels of crude, almost as much as PDVSA shipped in April, are sitting off the country’s main oil port.   Later on Thursday, PDVSA completed its first ship-to-ship transfer designed to ease a severe bottleneck of tankers around its main crude ports.    

The Louisiana Offshore Oil Port sold the equivalent of 5.53 million barrels of LOOP Sour crude oil storage in its monthly storage futures auction on Tuesday.  It is down from 7.34 million barrels of LOOP storage sold in the May auction. 

Enterprise Product Partners will bring in a second VLCC at its Texas City port terminal by the third week of June after a successful test run to berth mega tankers at the Houston Ship Channel facility. 

Gasoline stocks held in independent storage in the week ending June 7th increased by 4.47% on the week and by 17.94% on the year to 1.052 million tons.  Gasoil stocks fell by 0.77% on the week and by 23.29% on the year to 2.069 million tons while fuel oil stocks increased by 3.07% on the week and by 100.88% on the year to 1.141 million tons.  Naphtha stocks increased by 10.24% on the week and by 3.1% on the year to 366,000 tons while jet fuel stocks increased by 4.1% on the week but fell by 2.42% on the year to 685,000 tons.

Early Market Call - as of 8:45 AM EDT

WTI - July $65.73, down 22 cents

RBOB - July $2.1162, up 12 points

HO - July $2.1750, down 48 points