Refinery utilizations were up 0.4% at 89.2% this week. Imports were up for crude, but down for gasoline and distillates. Apparent demand for gasoline fell this week, while distillate demand rose.
Key Price Drivers
GEOPOLITICAL – Saudi Crown Prince has vowed to bring justice to Khashoggi’s killers after a phone call with Turkish President Erdogan. EU leaders say they are willing to extend the transition period for Brexit to allow for a smoother exit of the UK from the bloc. Communal clashes in Nigeria have forced officials to impose a 24-hour curfew hoping to gain control of the situation. Afghanistan parliamentary elections were extended one day (Sunday) to allow voters sufficient time to cast votes due to security threats and logistical issues. Other regions of the country will be voting later, but signs are promising that vast majority are willing to stand up for democracy.
ECONOMIC – Fed remains committed to pulling back on stimulus and increasing interest rates slowly to prevent an overheated economy. Jobless rate remains around 3.7 percent which is considerably below what is considered full employment. Market still anticipates another rate increase in December with three more in 2019 and possibly two in 2020. Consumer sentiment supports a growing economy and major retail CEO’s are seeing that reflected in their business. New home sales have fallen in September blamed on higher interest rates and possible lower inventory particularly in Southeast due to hurricane impact.
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