WTI Has Reached Its Highest Level Since The Early April Tariff Bomb

Energy futures are moving higher for a 4th straight session, and WTI has reached its highest level since the early April tariff bomb sent markets reeling. While refined products are keeping pace with WTI so far this morning, RBOB futures have been lagging the rally in general, and gasoline crack spreads have dropped to their lowest level in 2 months during this rally, suggesting refiners aren’t enjoying the move as much as producers.

Optimism over ongoing trade talks between the U.S. and China is getting credit for some of the move higher this morning, and reports suggest that U.S. ethane exports to China are set to surge following these negotiations after they were temporarily halted last week.

Reports Monday on a survey of estimates (AKA guesses) on OPEC’s May oil production suggest that the cartel’s actual output is still lagging behind its recently revised targets. OPEC’s monthly oil market report with the actual production figures is due out on Monday June 16.

Monday the EIA highlighted the record setting production of oil, natural gas, natural gas liquids and renewables in the U.S. last year. The combination of record setting production is why the U.S. is now producing more total liquid fuels than any nation ever has (and roughly the same amount as Saudi Arabia and Russia combined) and why we went from the world’s largest buyer of petroleum 20 years ago to the largest seller today.

P66 had an upset at the 367mb/day Wood River (St. Louis area) refinery in a sulfur unit overnight that caused unplanned flaring. The report to Illinois’ emergency management agency did not provide further details on operations at the facility.

Irving oil announced a $100 million investment in upgrading an FCC unit at its 320mbday St. John NB refinery. That facility is both the largest refinery in Canada, and the largest supplier to the New England region, with roughly 80% of its output delivered to the U.S.. There was widespread speculation on the future of that facility last year as the company did a review on its strategic alternatives. The decision to remain privately held and continue pouring money into the facility is certainly not what other Atlantic Basin refineries struggling to make ends meet were hoping for.