Energy Futures Are Off To A Lackluster Start For This Week’s Last Trading Session

Energy futures are off to a lackluster start for this week’s last trading session. RBOB, WTI, and Brent contracts are drifting .3%-.6% lower so far this morning while HO, the lonely holdout, is exchanging hands about 1 ½ cents higher than yesterday’s settlement.

Thursday was a slow day for refinery news compared to earlier this week, with only one domestic headline: Phillips 66 was forced to slow operations at its 256mbd refinery in Sweeny, TX due to cold weather impacts. This is the latest refinery along the Gulf Coast to suffer production loss due to the impact of Sunday’s “Arctic Blast”. Gulf Coast gasoline and diesel differentials have remained unaffected, trading around the same level all week.

Headline values from the DOE report came in lower than expectations, but didn’t seem to ruffle any feathers when they were released yesterday. National gasoline and diesel stockpiles rose by 3.1 and 2.4 million barrels last week while crude oil stocks dropped 2.5 million barrels.

Yesterday’s report also showed refined product inventories in the Midwest are near their 5-year highs, with diesel setting a new seasonal high last week. Also setting a seasonal high were the refinery runs in the region. Combine that with a weather-related demand slouch and no one is surprised bulk product in Chicago and the Group are trading at 40 cent discounts to the NYMEX.

The lack of news out of the Red Sea seems to be contributing to today’s slow start. Last we heard yesterday there was another Houthi missile attack on a US-owned ship the in the area in response to the fourth round of retaliatory strikes by the US Navy. There hasn’t been any fresh news to suggest pervasive shipping disruptions in the Red Sea aren’t already priced in.

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