News Archive

Market Talk - 2019 october

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Market TalkWednesday, Oct 30 2019

Heavy Selloff Ended On A Bounce

What looked like a heavy selloff yesterday ended on a bounce with RBOB futures adding .0129 on the day and HO losing just 55 points. Prices look similar this morning if a bit muted ahead of inventory data due out from the EIA at 9:30 CDT.

A good reminder as to why the market typically waits for the EIA data as some can’t seem to agree on the API’s crude oil inventory change last week:

+4.45 million barrels

-1.7 million barrels

-708,000 barrels

Without choosing which number to believe, some are attributing the slight downward pressure felt this morning to US-China trade war resolution delays, which may not be ready to execute next month.

WTI futures held above a main resistance level at $55.50 yesterday after testing waters beneath it. A bearish EIA report could press the issue and cause crude prices to break out to the downside, possibly leading to the $54 level.

Click here to download a PDF of today's TACenergy Market Talk.

Market TalkTuesday, Oct 29 2019

Energy Complex Likely to Open Lower

The energy complex will likely open lower this morning, continuing to retrace last week’s gains. Uncertainty surrounding potential OPEC+ (read OPEC+Russia) production cuts and anticipated inventory builds are being blamed for the lower price action today. While it seems most headlines preceding decisions from the oil cartel and its main ally seem mostly to be conjecture, we won’t have to wait long to see if cuts are in the cards since the next supply meeting is set for December 5th & 6th.

The S&P 500 hit record highs yesterday, widening the gulf between energy and equities prices that traded in tandem just a year ago. Unrelated asset classes trading independently is typically a sign of a healthy market; that may not mean much to production rigs which reached a 2 year low last week due to unviable economics.

Tropical activity is pretty quiet for now, with only one area that could potentially develop into a system out in the mid-Atlantic. While we are on the tail end of the 2019 Atlantic Hurricane season, we could still see development going into the end of the year. On this day 7 years ago Hurricane Sandy made landfall on the US mainland and went on to be the most destructive storm of the 2012 season.

WTI futures are testing support levels this morning helping keep the crude benchmark above $54.50. If broken there is little in the way to keep prices from threatening the $51 range. It’s a different story with refined products futures, facing a slew of resistance levels in between current prices and a likewise 6.5% drop.

Click here to download a PDF of today's TACenergy Market Talk.

Market TalkFriday, Oct 25 2019

Energy Prices Are Stumbling To Start Friday's Trading

Just when it seemed like a technical breakout was underway, energy prices are stumbling to start Friday’s trading, putting a temporary damper on the upward enthusiasm after a strong showing this week. The big 4 petroleum contracts were all able to break and hold above their October highs in Thursday’s session, leaving room on the charts for a push towards the levels reached in the wake of the September attacks on Saudi infrastructure.

The early weakness is getting blamed on new economic concerns, although it is just as likely to be caused by profit taking by those suspicious of this market’s staying power. If today’s early losses hang on through the close, yesterday’s highs start to look like a bull trap as the seasonal window for a substantial price rally is quickly closing.

There’s a system churning through the Gulf of Mexico that’s given a 70% chance of becoming a named storm by the NHC, and the early projections point it right at the heart of US refining. The good news is a cold front is (currently) expected to prevent this system from becoming a hurricane, but it will bring heavy rains to large parts of the US, with forecasts of 5” or more extending north all the way to the Tennessee valley for the weekend.

The EIA published a report on the issue of small refinery exemptions to the RFS this morning that’s worth reading for anyone looking for a bit more perspective on the issue than the typical lobbying efforts posing as news that have become common over the past few years.

Good news for Citgo: The US treasury granted the refiner a 3 month shield from a potential seizure by creditors, which is seen as an attempt to buy time to negotiate a better long term solution for the company caught up in the Venezuelan debacle.

Click here to download a PDF of today's TACenergy Market Talk.