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Crude rally derailed by payroll data

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Crude rally derailed by payroll data

Crude oil prices were buoyed for most of the week, as solid GDP numbers and robust manufacturing data led oil prices higher leading into the US’s non-farm payrolls report.  Employment data in the US has been relatively strong with ADP reporting better than expected private payrolls and the Department of Labor reporting that jobless claims has contracted.  Friday payroll report was weaker than expected creating headwinds for petroleum.

Petroleum inventories have declined over the past few weeks, but this week’s small increase snapped a 3-week trend which saw crude oil inventories decline by more than 27 million barrels.  The declines in crude stocks have been a function of refinery demand which have been running near full capacity as product (gasoline and distillates) demand has been the strongest in the past 5-years.

Demand in the US and globally for products has been very solid of late. Total products demand over the last four-week period averaged over 19.5 million barrels per day, up by 3.7 percent from the same period last year. Over the last four weeks, gasoline demand has averaged over 9.0 million barrels per day, up by 3.2 percent from the same period last year. Distillate demand averaged 4.0 million barrels per day over the last four weeks, up by 15.2 percent from the same period last year.

Crude oil prices were buoyed for most of the week, as solid GDP numbers and robust manufacturing data led oil prices higher leading into the US’s non-farm payrolls report.  Employment data in the US has been relatively strong with ADP reporting better than expected private payrolls and the Department of Labor reporting that jobless claims has contracted.  Friday payroll report was weaker than expected creating headwinds for petroleum.

Petroleum inventories have declined over the past few weeks, but this week’s small increase snapped a 3-week trend which saw crude oil inventories decline by more than 27 million barrels.  The declines in crude stocks have been a function of refinery demand which have been running near full capacity as product (gasoline and distillates) demand has been the strongest in the past 5-years.

Demand in the US and globally for products has been very solid of late. Total products demand over the last four-week period averaged over 19.5 million barrels per day, up by 3.7 percent from the same period last year. Over the last four weeks, gasoline demand has averaged over 9.0 million barrels per day, up by 3.2 percent from the same period last year. Distillate demand averaged 4.0 million barrels per day over the last four weeks, up by 15.2 percent from the same period last year.

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