Crude Oil WTI Futures Market News and Commentary
Oct WTI crude oil (CLV19) this morning is down -0.73 (-1.32%), Oct Brent crude oil (CBV19) is down by -0.21 (-0.35%), and Oct RBOB gasoline (RBV19) is down by -0.0068 (-0.44%). The energy complex is moving lower today with Oct WTI crude at a 2-week low and Oct RBOB gasoline at a 1-week low as escalation of U.S./China trade tensions undercuts the prospects for economic growth and energy demand. Trade tensions intensified today after China's Ministry of Commerce said it will impose additional tariffs on $75 billion of U.S. goods in retaliation for U.S. tariffs on Chinese goods with some of the tariffs starting Sep 1 and the rest on Dec 15. Escalation of trade tensions sent the yuan down to a new 11-1/4 year low today of 7.1017 yuan/USD. A rally in the dollar index to a 3-week high today also weighed on energy prices as did U.S. economic data that showed Jul new home sales unexpectedly fell -12.8% to 635,000, weaker than expectations of +0.2% to 647,000. Crude prices recovered from their worst levels today after Fed Chair Powell said the Fed "will act as appropriate to sustain the expansion," which signals he may favor additional rate cuts to boost economic growth that would be positive for energy demand. Wednesday’s EIA data showed that U.S. crude oil inventories as of Aug 16 were +3.4% above the seasonal 5-year average, gasoline inventories were +4.2% above the 5-year average, and distillate inventories were -1.7% below the 5-year average. U.S. crude production was unchanged at 12.3 million bpd in the week of Aug 16, which was just slightly below May's record high of 12.4 million bpd.