Green Futures Markets Are The Theme This Week
Green futures markets seem to be the theme this week with past and present weather impacts in the driver seat. American crude oil, gasoline, and diesel benchmarks are adding .5%-1% gains so far this morning as the market intently watches for headlines on flooding and power outages along the Gulf Coast.
Tropical storm Nicholas has made landfall in southern Texas and is heading towards Houston, the center of the storm set to arrive early this afternoon. There hasn’t been any reports of refinery closures as of yet but word from the major players is they will take action as necessary to safely maintain operations if possible.
Unfortunately it seems the Houston refinery cluster isn’t the only concern for this iteration of storm activity. Plants in Port Arthur, Lake Charles, and Baton Rouge are also within Nicholas’s forecast error cone putting over a third of the nation’s refining capacity at risk. Moreover refineries in New Orleans could be especially susceptible to flooding and power outages should Nicholas shift east over the next couple of days, with 20+ inches of rainfall estimated.
Oil technicals are flashing buy signals this week with the prompt month contract poised to test the $75 level. The recovery rally we’ve experienced for the past year and a half has more than made up for the COVID crash that took place in early 2020. Should the upward momentum seen this week sustain past some resistance levels set last month, the energy complex could look to test waters not seen since 2015.