Refined Product Prices Taking A Breather

Market TalkWednesday, Jun 19 2019
Heavy Selling In Energy Futures

Refined product prices are down slightly so far this morning, taking a breather after seeing some buying pressure Tuesday. American gasoline and diesel and European crude oil futures are all down around half a percent this morning while American crude is up just a couple cents per barrel.

The American Petroleum Institute published their weekly national inventory levels yesterday afternoon with a limited market reaction. The trade association estimates a net build in crude oil inventories of .8 million barrels of crude oil and gasoline stockpiles at 1.4 million barrels. Diesel stocks are expected to be about the same as last week, with a drawdown of only 50 thousand barrels. The Department of Energy will publish their weekly report at their regular scheduling this morning at 9:30 CDT.

All quiet on the hurricane front so far this season: a combination of warmer-than-average sea temperatures in the Pacific ocean (AKA El Niño, or The Niño) and plumes of transient, windblown dust from the Saharan desert are keeping tropical development to a minimum so far this year. The National Hurricane Center expects no cyclonic activity to develop for the next couple days, at least.

The dovish signals from the European Central bank incited buying on Wall Street yesterday, bringing the energy complex along for the ride. The US Federal reserve will publish its monetary policy summary later this afternoon and most expect a more hawkish outlook. However, traders also expect the Fed to cut rates at least one more time this year, most likely next month, in an effort to keep the American economy chugging along.

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Market TalkWednesday, Nov 29 2023

The API Reported Gasoline Inventories Dropped By 898,000 Barrels Last Week

Gasoline and oil prices are attempting to rally for a 2nd straight day, a day ahead of the delayed OPEC meeting, while diesel prices are slipping back into the red following Tuesday’s strong showing. 

The API reported gasoline inventories dropped by 898,000 barrels last week, crude inventories declined by 817,000 barrels while distillates saw an increase of 2.8 million barrels. Those inventory stats help explain the early increases for RBOB and WTI while ULSD is trading lower. The DOE’s weekly report is due out at its normal time this morning. 

A severe storm on the Black Sea is disrupting roughly 2% of the world’s daily oil output and is getting some credit for the bounce in futures, although early reports suggest that this will be a short-lived event. 

Chevron reported that its Richmond CA refinery was back online after a power outage Monday night. San Francisco spot diesel basis values rallied more than a dime Tuesday after a big drop on Monday following the news of that refinery being knocked offline.

Just a few days after Scotland’s only refinery announced it would close in 2025, Exxon touted its newest refinery expansion project in the UK Tuesday, with a video detailing how it was ramping up diesel production to reduce imports and possibly allow for SAF production down the road at its Fawley facility. 

Ethanol prices continue to slump this week, reaching a 2-year low despite the bounce in gasoline prices as corn values dropped to a 3-year low, and the White House appears to be delaying efforts to shift to E15 in an election year. 

Click here to download a PDF of today's TACenergy Market Talk.

Pivotal Week For Price Action
Market TalkTuesday, Nov 28 2023

Values For Space On Colonial’s Main Gasoline Line Continue To Drop This Week

The petroleum complex continues to search for a price floor with relatively quiet price action this week suggesting some traders are going to wait and see what OPEC and Friends can decide on at their meeting Thursday. 

Values for space on Colonial’s main gasoline line continue to drop this week, with trades below 10 cents/gallon after reaching a high north of 18-cents earlier in the month. Softer gasoline prices in New York seems to be driving the slide as the 2 regional refiners who had been down for extended maintenance both return to service. Diesel linespace values continue to hold north of 17-cents/gallon as East Coast stocks are holding at the low end of their seasonal range while Gulf Coast inventories are holding at average levels.

Reversal coming?  Yesterday we saw basis values for San Francisco spot diesel plummet to the lowest levels of the year, but then overnight the Chevron refinery in Richmond was forced to shut several units due to a power outage which could cause those differentials to quickly find a bid if the supplier is forced to become a buyer to replace that output.

Money managers continued to reduce the net length held in crude oil contracts, with both Brent and WTI seeing long liquidation and new short positions added last week. Perhaps most notable from the weekly COT report data is that funds are continuing their counter-seasonal bets on higher gasoline prices. The net length held by large speculators for RBOB is now at its highest level since Labor Day, at a time of year when prices tend to drop due to seasonal demand weakness. 

Click here to download a PDF of today's TACenergy Market Talk.