Sell-Off Continues In Energy Futures
The sell-off continues in energy futures after a 1 day respite, as oil prices now trade within $1/barrel of the levels we saw before the attack on Saudi Arabia 2 weeks ago. Overnight losses for refined products were bouncing between 1-2 cents overnight, but another wave of selling began around 7:20 that took those losses to 4 cents before prices found a temporary floor.
It’s not yet clear what caused that latest sell-off, as equities are pointing to a higher open, and no new headlines seem to be taking the blame. It could just be that a bullish position holder finally threw in the towel after a brutal week of selling.
West Coast gasoline markets continue to stand out this week, as October pipeline trading kicked off in style, wiping out the 20 cents of backwardation from September trading Thursday, keeping prompt values some 80-90 cents above other regional markets. A lack of imports and low production from West Coast refiners have both been cited, along with the inability to source product from other states due to California’s boutique fuel grades.
Good news on the storm front. While Hurricane Lorenzo has strengthened into a category 4 hurricane as it heads north through the Atlantic, it poses no threat to land and Tropical Storm Karen is falling apart and is forecast to dissipate before approaching the US next week.