Stocks rose Wednesday as investors considered the aftermath of a raucous first presidential debate and continued to eye developments among congressional lawmakers for further fiscal stimulus.
Marathon Petroleum Corp's oil-refining unit is cutting at least 6% of its staff, according to people familiar with the matter, demonstrating the depth of declining fuel demand during the pandemic. Refiners and oil producers have been cutting staff, slashing spending and reducing production to cope with weak prices and a global glut of fuel. U.S. gasoline futures are down 26% from a year ago and oil futures are trading down a third from where they began the year.
(Bloomberg) -- Oil gained as shrinking U.S. crude supplies added to optimism over signals that lawmakers and the White House will reach a fiscal stimulus deal.Futures in New York rose as much as 1.9% on Wednesday. The Energy Information Administration reported domestic crude inventories fell nearly 2 million barrels last week to the lowest level since April. The decline was larger than expected. The American Petroleum Institute reported Tuesday crude supplies shrank 831,000 barrels.Meanwhile, Treasury Secretary Steven Mnuchin said he sees one more chance at securing a deal with Democrats on another fiscal stimulus package. He said Wednesday that he expects a relief proposal similar to the $1.5 trillion plan put forward by a bipartisan group of House members.“If you have a draw in overall products, while the refineries are more active,” it bodes well for the demand outlook, said Quinn Kiley, a portfolio manager at Tortoise. A stimulus deal in the U.S. “should drive continued consumption, and we should see some draws as the market balances.”Progress on a stimulus deal could help instill some needed optimism in a market faced with an otherwise dreary demand outlook. U.S. crude futures are on track to post a roughly 6% decline this month as new flareups in coronavirus cases across major economies fuel concerns over a sustained recovery in consumption.Mercuria Energy Group Chief Executive Marco Dunand said oil consumption could rebound from the coronavirus in about 18 months, while Torbjorn Tornqvist, his counterpart at Gunvor Group Ltd., and hedge fund manager Pierre Andurand, both saw the timeframe closer to two years.Distillate stocks have been stubbornly high, remaining above 170 million barrels since May, according to the EIA.“The distillate inventories are still terribly high,” said Tom Finlon of GF International. “But directionally over the last couple of weeks, it’s starting to look a little better,” providing at the least a stabilizing influence for prices.Market signals point to further weakness for both benchmarks. WTI’s nearest December contract is trading around a $2.70-a-barrel discount to the December 2021 contract, compared to $2 a barrel at the end of August, while Brent’s December-December spread has also deepened its contango this month.At the same time, the onset of the northern hemisphere’s fall season is sparking a fresh slump in commercial flights, adding further woes to the world’s oil refineries as they struggle with a glut of jet fuel that’s crushing profitability. The combined refining margin for gasoline and diesel, which serves as a rough profit gauge for processing a barrel of crude, fell below $9 a barrel on Wednesday after trading above $10 in August.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.