Distillate Inventories Surprise Higher

Confirms large inventory draw last week – ING

As widely expected, the Fed has resumed cutting interest rates with a 25bp move yesterday. They think three more cuts will be enough to boost growth and prompt a revival in the jobs market, but the market is sceptical. ING's United States economist looks for four more 25bp cuts before trade clarity, a weaker dollar and lower borrowing costs start to stabilise the situation, ING's commodity experts Ewa Manthey and Warren Patterson note.

Crude exports jump by almost double the previous week

Meanwhile, United States weekly inventory numbers from the EIA yesterday were mixed for the oil market. United States commercial crude oil inventories reported large declines of 9.3m barrels over the last week, well above the 3.4m barrel draw the API reported the previous day. The drop comes as exports almost doubled from the week before, while imports fell. Total oil stocks stood a little over 415m barrels, 5% below the five-year average.

• Crude exports jumped by almost double the previous week and rose by 2.5m b/d to 5.3m b/d.
• Crude oil imports fell by 579k b/d to 5.7m b/d.
• Crude stocks at Cushing fell by 296k barrels for a second consecutive week to 23.6m barrels.

Refined products

• Gasoline stocks fell by 2.3m barrels to 217.6m barrels, 1% below the five-year average.
• Gasoline demand rose by 302k b/d to 8.8m b/d, while the market had expected a marginal build of 611k barrels.
• Distillate fuel stocks jumped by 4m barrels to 124.7m barrels, against expectations of a 1.24m barrel increase. This was the highest level since late January as exports continued to edge lower.

This should help ease some pressure on a tight diesel market, heading into the peak demand season for agricultural harvests and winter heating.