Inside Futures: Today’s Market Focus

“April crude oil prices this morning are trading down -45 cents and Apr gasoline is -1.79 cents. Apr crude oil yesterday rallied after mid-morning and continued higher into the close to finally settle up +$1.14 per barrel. Apr gasoline closed up +3.84 cents per gallon. Bullish factors included (1) a weaker dollar, (2) the unexpected decline in weekly gasoline inventories (-895,000 bbl versus expectations of a +550,000 bbl build), and (3) the prediction from energy consultant Poten & Partners that China, the world’s second-largest energy consumer, may boost its refining capacity by more than 10% by 2014, which may lead to increases in its crude oil imports. Bearish factors for crude prices yesterday included (1) the larger-than-expected increase in weekly crude oil inventories (+3.03 million bbl versus expectations of +1.9 million bbl), (2) the end of the refinery strike in France after Total SA signed an agreement with its labor unions, (3) the smaller-than-expected decrease in weekly distillate inventories (-591,000 bbl versus expectations of -1.7 million bbl), and (4) the larger-than-expected increase in the refinery capacity rate (+1.4 to 81.2% versus expectations of +0.2 to 80.0%), which bodes well for further increases of gasoline and distillates in the weeks ahead.”