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·         Crude: Saudis go for the save

Saudi Arabia is trying to talk up the markets saying an output extension is all but done after yesterday’s supportive oil supply report failed to get us to the next level…

 

·         U.S. Gasoline Contained More Than 10% Ethanol in 2016

 

 

Crude: Saudis go for the save

Daily Energy Market Analysis

 

By Phil Flynn, Futures Magazine

April 20, 2017

 

Saudi Arabia is trying to talk up the markets saying an output extension is all but done after yesterday’s supportive oil supply report failed to get us to the next level. There was a 1.0 million barrel drawdown in oil inventory overall and in Cushing, Oklahoma the inability of the market to move higher started a cavalcade of selling. At first, the movement was modest but an hour after the report, a big spike in volume started the market of its downward trek.Part of the selling was perhaps due to the May Crude contract at the NYMEX is expiring but also due to a spike in computer related sell signals. The mood seemed to get darker as the macroeconomic picture became worrisome with some disappointing earnings and a speech by Speaker Paul Ryan saying that it was unlikely that tax reform would be done by this summer.

 

Some point to the fact that gasoline inventory increased by 1.5 million barrels but that should have been offset somewhat by the much larger than expected 2.0 million barrel drop in distillate supply. U.S. crude production did rise by 170,000 barrels a day but that should have been expected. Refinery runs were bullish as crude oil refinery inputs averaged over 16.9 million barrels as refiners ran at 92.9% of capacity. Regardless, the mood of the market turned negative when we failed to move higher.

 

This morning we are seeing a bit of a rebound. After falling over 3% the market is now up over 1%. The reason is because Saudi Ariba is jawboning the market higher trying to remove any doubt that the OPEC and non-OPEC producers are on track to extend the historic production cut. Saudi minister of energy and industry Khalid A. Al-Falih said that “though there is a high level of commitment [to cuts], we haven’t reached our goal, which is to {get supply}to reach the five-year average. There is an initial agreement that we might be obligated to extend to get to our target.”

 

U.S. gasoline production decreased last week, averaging 9.8 million barrels per day. Distillate fuel production increased last week, averaging just about 5.2 million barrels per day. This has week over week demand for gasoline dipped. Total products supplied over the last four-week period averaged over 19.7 million barrels per day, down by 0.8% from the same period last year as we are seeing a year over year deficit for the first time in a couple of years.

 

Demand for gas came in at 9.3 million barrels per day, down by 0.7% from the same period last year. Distillate fuel product supplied averaged 4.3 million barrels per day over the last four weeks, up by 9.9% from the same period last year.

 

Reuters is reporting that in China, signs emerged that refiners were using record crude imports to produce more fuel such as gasoline and diesel than the country can absorb...

 

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http://www.futuresmag.com/2017/04/20/crude-saudis-go-save

 

 

U.S. Gasoline Contained More Than 10% Ethanol in 2016

 

USAgNet - 04/20/2017

 

Gasoline consumed in the United States in 2016 contained more than 10% ethanol on average for the first time ever, according to an analysis of U.S. Energy Information Administration data released by the Renewable Fuels Association. The EIA data dispels the myth that 10% is the marketplace limit for ethanol content in U.S. gasoline, and demonstrates that the so-called "blend wall" is not a real constraint on ethanol consumption.

 

According to EIA data, finished motor gasoline consumption totaled 143.367 billion gallons in 2016. That volume of gasoline contained 14.399 billion gallons of ethanol, meaning the average ethanol content of gasoline consumed in 2016 was 10.04%. According to the RFA report, the data "...further underscore that statutory Renewable Fuel Standard blending obligations in excess of the 10.0% level can be readily satisfied by the marketplace."

 

Growing consumption of E15...

 

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http://www.usagnet.com/story-national.php?Id=818