Selloff Snowballs Mid-Morning
Yesterday’s selloff in gasoline prices, inspired by news of a delay in the first step to a US-China trade resolution, snowballed mid-morning but settled off of the lows. Prompt month RBOB was down well over a nickel but ended the day just 2.5 cents lower. WTI and HO futures likewise settled above their respective lows but only just, each shedding over 2% in yesterday’s formal session.
The tropical disturbance currently passing over Guatemala and Belize is now projected to move into the Gulf of Mexico in the next 5 days. Forecasts still give the system a low 30% chance of development over the next week but Gulf Coast refiners will be keeping a close eye on its progress.
The American Petroleum Institute and Department of Energy will both release their respective reports a day later than usual this week since yesterday was a bank holiday. The Institute will publish theirs tomorrow afternoon and the DOE will release Thursday morning.
Refined product futures are 50-70 points positive this morning, perhaps feeling a bit oversold after yesterday’s action (uncertainty over international trade is nothing new after all), but upward action seems muted. Slowing global demand growth estimates from multiple agencies/organizations still looms over the complex and will likely keep at least some buyers at bay.