Gasoline RBOB Futures Market News and Commentary
Oct WTI crude oil (CLU19) this morning is down by -0.80 (-1.43%), Oct Brent crude oil (CBV19) is down by -0.62 (-1.04%), and Oct RBOB gasoline (RBU19) is down by -0.0087 (-0.57%). The energy complex is weaker this morning on a stronger dollar and increased U.S./China trade tensions. The dollar index has rallied to a 2-week high today, which is negative for most commodities prices in dollars. Trade tensions increased after U.S. Secretary of State Pompeo said today that Huawei Technologies is not the only Chinese company that poses risks to the U.S. Trade tensions undercut stocks today and fueled concern that the trade war will derail the global economy and energy demand. The yuan is down -0.14% today to 7.0603 yuan/USD, near below last Tuesday's 11-1/4 year low of 7.0726 yuan/USD. On the bullish side, data today from the OPEC+ Joint Technical Committee showed that OPEC+ compliance with crude production cuts rose to 159% in July from 137% in June. Tensions between Iran and the U.S. remain high, which is supportive for crude prices, after Iran on Monday warned the U.S. today against seizing its oil tanker that was released by Gibraltar Sunday night. That tanker had been seized by UK special forces in early July and had been impounded in Gibraltar on suspicion of carrying oil to Syria in violation of U.S. sanctions. The markets will now be watching to see if Iran releases the U.K.-flagged tanker that it seized in retaliation for the U.K.'s seizure of the Iranian tanker. Crude oil prices also have support on expectations for Wednesday's weekly EIA crude inventories to fall -1.5 million bbl. Last Wednesday's EIA data showed that U.S. crude oil inventories as of Aug 9 were +3.4% above the seasonal 5-year average, gasoline inventories were +3.6% above the 5-year average, and distillate inventories were -3.1% below the 5-year average. U.S. crude production was unchanged at 12.3 million bpd in the week of Aug 9, which was just slightly below May's record high of 12.4 million bpd.