Gasoline RBOB Futures Market News and Commentary
Nov WTI crude oil (CLX19) on Tuesday closed down by -0.78 (-1.46%), Dec Brent crude oil (CBZ19) closed down -0.61 (-1.03%), and Nov RBOB gasoline (RBX19) closed up +0.0012 (+0.07%). The energy complex settled mixed Tuesday as the bearish factor of global demand concern was offset by the bullish factors of a weaker dollar and a rally in stocks. Global demand concerns weighed on crude prices after the IMF on Tuesday cut its global 2019 GDP forecast to a 10-year low of 3.0% from a 3.2% estimate in July, the fifth time this year that the IMF has cut its GDP forecast. Crude oil prices were also undercut Tuesday by a Bloomberg report that raised doubts about a U.S./China trade deal after the report said China will struggle to buy $50 billion of U.S. farm goods annually unless it removes retaliatory tariffs on U.S. products. However, China is not likely to remove its penalty tariffs without reciprocal action by the U.S., which President Trump has so far refused to consider. Supportive factors for the energy complex Tuesday included a weaker dollar and a rally in the S&P 500 to a 3-week high, which bolsters economic and energy demand prospects. U.S. stock indexes rallied on Brexit optimism and better-than-expected Q3 earnings results from JPMorgan Chase, UnitedHealth and Johnson & Johnson. Brexit optimism spurred a rally in the Euro Stoxx 50 to a 1-3/4 year high Tuesday and was supportive for economic growth and energy demand prospects. Two EU officials on Tuesday said that UK and European negotiators are closing in on a draft Brexit deal. Crude oil prices found support Tuesday on strength in credit demand from China, the world's second-biggest crude consumer, which is positive for economic growth and energy demand prospects. China's Sep new yuan loans rose +1.690 trillion yuan, stronger than expectations of +1.260 trillion yuan and the biggest increase in 6 months. Also, China's Sep aggregate financing, the broadest form of credit growth, rose +2.270 trillion yuan, stronger than expectations of +1.900 trillion yuan. Crude oil prices were undercut by the consensus for Thursday's weekly EIA crude inventories to climb by +3.0 million bbl. Last Wednesday’s weekly EIA data showed that U.S. crude oil inventories as of Oct 4 were +1.3% above the seasonal 5-year average, gasoline inventories were +2.3% above the 5-year average, and distillate inventories were -9.5% below the 5-year average. U.S. crude production in the week ended Oct 4 rose +1.6% w/w to a new record high of 12.6 million bpd.