Prices Up After Yesterday's Downward Pressure
Prices are up today after yesterday’s trading saw some downward pressure on news that China plans on selling portions of its oil reserves in an effort to “stabilize prices”. Despite the announcement the energy complex is bouncing today with gas, diesel, and American crude oil futures all adding ~1.5% to their prompt month futures price this morning.
Tropical storm Mindy came and went earlier this week, dumping rain across north Florida before dissipating. Hurricane Larry will likely make landfall on the eastern-most tip of Newfoundland early tomorrow morning. Attention now turns to two areas that have a 70% chance of cyclonic development over the next five days. The system over Central America will likely garner the most attention as it looks to skip over the Yucatan Peninsula into the warm water of the Gulf of Mexico over the next week.
Near-term uncertainty prescribed the EIA’s STEO report published yesterday along with the across-the-board pull back in headline values from another EIA report (weekly inventory) seem to be taking credit for this morning’s buying action. More interesting than the drop in oil and product stocks is the pronounced impart Hurricane Ida had on crude production, refining throughput rates, and imports. While a storm knocking out a quarter of the nation’s refining capacity would have sent prices soaring nearly 10 years ago, the US’s status as a net exporter grants it the ability to turn off exports in the event of a supply disruption, limiting financial fallout for futures prices.