American And European Crude Oil Contracts Enjoy Modest Gains To Start The Day
The energy complex is drifting higher this morning, sans the New York Diesel contract, dropping around 2.5 cents while gasoline and American and European crude oil contracts enjoy modest gains to start the day. Prompt month WTI traded down to 8 month lows yesterday, below where it was trading before the war in Ukraine started. Renewed recession concerns took the blame for yesterday’s selloff, despite there being seemingly no new information that would spur such downward price action.
The American Petroleum Institute published their inventory estimates yesterday afternoon, showing a ~3.5 million barrel build in national crude oil inventory last week. Refined product stocks were mixed with gasoline dropping just under 1 million barrels and diesel building ~1.8 million barrels. Since the information collected by the API is given on a voluntary basis, the market typically waits for the Department of Energy’s weekly inventory report before deciding sentiment. That report is due out today at 10am CDT.
Hurricane Earl is forecast to become the Atlantic season’s first major hurricane, and while it may cause some disruptions in Bermuda (which is projected to just get some tropical-storm-force winds currently), it doesn’t look like the storm will impact energy infrastructure. Eyes are now turning to the mid-Atlantic system that’s given a 70% chance to organize over the next five days.
On the Pacific side of things, Hurricane Kay is set to make landfall in Baja California later today, and quickly dissipate into a tropical storm then depression this weekend. Flash flooding would be the main driver for energy disruptions in the area. Southern California, the majority of Arizona, and as far north as Las Vegas could see high amounts of rainfall and likewise flooding.