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Market Intel Archives

Oil markets up after EIA Inventory report release

November 15, 2013

The oil markets charged up yesterday after the EIA released its weekly DOE Inventory Report despite meeting market expectations of product draws in the gasoline and distillates, and an 8th consecutive the build of commercial crude oil stocks. Two major triggers seem to have caused the reaction in NYMEX RBOB hitting a recent high of 2.7148 then settling down to 2.6837, up 5.57 cents on the day, along with NYMEX ULSD (HO) closing up 3.29 cents to 2.9306. NYMEX Crude (WTI) ultimately finished down 12 cents to 93.76. First, total gasoline stocks, over the past 4 weeks, are down by 8.1MMbs and now stand at only 2%, or a 4.1MMb surplus to the five year average. The December contract is currently in a 2 cent backwardation, or is 2 cents higher in the front month (December) relative to the March RBOB contract. The market is reflecting its anxiety with current supply. Although current levels are higher than last year, the comparison does not include Hurricane Sandy, so consider that PADD 1 (East Coast) gasoline stocks have shrunk to 52.8MMbs, or only at a 4.3% surplus to the five year average. Second, on the demand side, the market also focused on the 3rd straight increase in total product demand of 20 MM b/d. However, when looking at the content of the demand, gasoline demand was down along with heating oil. The big demand increase came from "other oils", to the tune of 1 million barrels/day.

 Currently, it looks like the markets are taking a breather as NYMEX ULSD (HO) is up 28 points to 2.9339, NYMEX RBOB is down 42 points to 2.6795, NYMEX Crude (WTI) is up 30 cents to 94.06, and ICE Crude (Brent) is down 11 cents to 108.17.

Click to view today's full market watch report for refined products in a printable and downloadable format.

Oil markets up in anticipation of the EIA inventory report

November 14, 2013

Yesterday oil markets moved up across the complex in anticipation of the EIA’s (Energy Information Administration) weekly inventory data that may show implied demand for oil products is rising. Although the past two consecutive reports have showed US oil demand reaching 20 million barrels per day for the first time since January 2009, some analysts believe that the strength in products yesterday due to expectations of a bullish inventory report is premature. Upon this writing, inventory expectations are varied from Citi Futures estimating product draws for distillates between -2 and -3 MMbs and gasoline -.5 and -1.5 MMbs, while Bloomberg is estimating at -.95 MMbs for distillates and -.55 MMbs for gasoline. Crude stocks are expected to build, but again varying from +1 to +3 MMbs. Refinery runs are expected to be unchanged as seasonal maintenance is starting to taper. Therefore, just as the market could have been pricing in additional draws in products due to increasing implied demand and seasonal maintenance work, the market could react differently if those bullish factors do not come to fruition. The December NYMEX Crude contract expires today, potentially adding some volatility as well.  Currently NYMEX Gasoline (RBOB) is up 2.75 cents to 2.6555 prior to the release of the EIA’s weekly DOE Inventory Report, while NYMEX Diesel (HO) is slightly up 11 points to 2.8988, and NYMEX Crude (WTI) is down 71 cents to 93.17. 

Oil markets ended down admist chatter about the ongoing builds of crude

November 13, 2013

Tomorrow at 10:30am, the weekly DOE Inventory Report will get issued by the EIA, a day late due to the Veteran’s Day holiday.  However, there was already chatter about the on-going builds of crude, perhaps prompting the energy complex to end down across the board yesterday. NYMEX WTI Crude finished down $2.10 to 93.04, a five month low.  NYMEX Diesel (HO) finished down 3.81 cents to 2.8532, along with NYMEX Gasoline down a penny to 2.5864. Across the Atlantic, the December ICE Brent Crude contract settled down as well, 64 cents, to 105.54 and will expire tomorrow.  Perhaps the driver behind the move down yesterday was market concern over the Federal Reserve’s eventual tapering of their quantitative easing (QE) programs , but that was minimized by Minneapolis Fed President, Narayana Kocherlakota’s statement that “Reducing the flow of [asset] purchases in the near term would be a drag on the already slow rate of progress of the economy toward the [FOMC] committee’s goals,” (Reuters). Lastly,  the IEA (International Energy Agency) released its annual World Energy Outlook 2013 yesterday and from their fact sheet, one bullet stands out: “Oil supply rises from 89 mb/d in 2012 to 101mb/d in 2035 in the New Policies Scenario………[and] [t]he United States is the world’s largest oil producer for much of the period to 2035.” All said, the move down yesterday could have been a collection of these three factors.

Currently, as the markets have opened, yesterday’s declines have all been erased for the products with NYMEX Diesel (HO) at 2.8873, up 3.45 cents and NYMEX RBOB at 2.6204, up 3.40 cents. NYMEX Crude is up 58 cents to 93.62 while Ice Brent Crude is up $1.22 to 107.03.

View today's full refined products market watch report in a printable and downloadable format.

Refined products glossary.

Oil markets were up across the board

November 12, 2013

Oil markets were up across the board yesterday as NYMEX Gasoline (RBOB) was the biggest mover, up 4.31 cents to 2.5965 on fears that the Phillips 66 Bayway Refinery in Linden, NJ was not coming back on line as quickly as the market expected, spurring the upward momentum across the complex.  NYMEX Crude (WTI) closed up 54 cents to 95.14 followed by NYMEX Diesel (HO) up 1.94 cents to 2.8913. We continue to watch  ICE Brent Crude, the benchmark contract for European refiners (and East Coast refiners as well) as the geo-political dynamic of stalled Iranian nuclear program talks along with supply disruptions in Libya and Nigeria continue to fuel upward momentum on the contract that finished up $1.15 to 106.18. As US East Coast refiners continue to transport  and use cheaper Bakken crude feedstock (WTI Crude benchmarked), the margin advantage to export refined products across the Atlantic will continue, and in the short term, could put basis pressure on New York harbor distillate and gasoline cash prices. Currently the NY Harbor cash price for gasoline is 4 cents over its NYMEX (RBOB) contract, while #2 heating oil is 1.25 cents under the NYMEX, and ULSD is 65 points over.

Currently, just after the open, NYMEX Crude is down 46 cents to 94.68 along with NYMEX Diesel, down 32 points to 2.881. NYMEX RBOB is up 1.96 to 2.6161. The ICE Brent Crude contract is up 56 cents to 106.96.

View today's full refined products market watch report with Kris Magnusson.

Refined products glossary

Heating oil dealers, note an Artic cold mass moving into New England

November 11, 2013

Oil markets closed up on Friday motivated by failing talks to consolidate a resolution between the West and Iran during trading on Friday and continued through the weekend. Oil continued to firm through the weekend. Currently, upon the open, NYMEX Crude (WTI) is down 35 cents to 94.25, while the rest of the complex is trading higher with ICE Brent Crude up 71 cents to 105.83. NYMEX Diesel (ULSD-HO Contract) up 33 points to 2.8752 and NYMEX Gasoline (RBOB) up 67 points to 2.5601. The 3.27 cent gain from Friday on NYMEX Diesel still left the contract down on the week, whereas the 5.03 cent gain on NYMEX RBOB left the contract up 80 points on the week.

 

Of interest to heating oil dealers, according to the Northeast Energy Weather Service, an arctic cold mass has moved into upstate NY and will move into the New England area through Wednesday, with cold temperatures not seen since last winter. By the end of the week, temperatures will moderate to seasonably normal Thursday through Friday and will maintain daily normal temperatures through November 20th.  Additionally, the CFTC published its first full report since the government shut down and Wall Street reduced its bullish position on both WTI Crude and RBOB to a four month low of 233,850 WTI Crude futures and options contracts and 29,060 RBOB contracts, respectively. However, Wall Street increased its length on NYMEX Diesel for the first time in three weeks to 27,159 contracts. Cash prices for #2 heating oil in New York Harbor are holding at a penny under the NYMEX screen.

Oil markets down despite significant product draws reported

November 08, 2013

Despite significant product draws reported on the weekly DOE Inventory Report on Wednesday, oil markets were down across the board yesterday as NYMEX Diesel closed down 3.04 cents to 2.8392, NYMEX Gasoline (RBOB) closed down 4.49 cents to 2.5031, NYMEX Crude closed down 60 cents to 94.20, and ICE Brent Crude was down $1.78 to 103.46. NYMEX Diesel was most likely pulled down by the decline in the ICE Brent contract and warmer European temperatures easing their import demand for the moment, as NY Harbor cash prices for #2 heating oil have stabilized to a penny under the NYMEX for the past week. One month ago, NY Harbor #2 heating oil was almost 6 cents under. Currently, oil markets are up before the open with NYMEX Diesel up 12 points to 2.8404, NYMEX Gasoline up 1.29 cents to 2.5160, NYMEX WTI Crude up 28 cents to 94.48, and ICE Brent Crude up 45 cents to 103.91.

Oil markets up after DOE inventory report released

November 07, 2013

Oil markets were up yesterday after the weekly DOE Inventory Report was released. Larger than expected draws on the product side with stocks of distillates down 4.9 MMbs and gasoline down 3.76 MMbs, moved their respective NYMEX contracts up a half penny for NYMEX Diesel and up 3.19 cents for NYMEX RBOB. Distillates stocks now stand at an 18.2% deficit to the 5 year average, while gasoline stocks are at a 2.4% surplus to the 5 year average.  Commercial crude oil stocks built a seasonal 1.58 MMbs, close to market expectations, and now for the third week in a row, domestic production of crude oil exceeded imports. Crude closed up $1.43 to 94.80.  The current draws of ULSD and gasoline, particularly out of PADD 1, continue to make the case for product exports to European markets and the impact on NY Harbor basis strengthening.

 

Currently, the oil markets are mixed as NYMEX Diesel is down 1.85 cents to 2.8511 and NYMEX RBOB is down 1.25 cents to 2.5355 before the open. NYMEX Crude is up 20 cents to 94.99.

Oil markets up after closing down

November 06, 2013

Oil markets are up this morning after closing down yesterday.  Anticipation of product draws for the EIA’s (Energy Information Administration) DOE Inventory Report release at 10:30am could be the reason for the current move up as the American Petroleum Institute (API) released its inventory estimate showing a rise of 871,000 barrels of crude, with gasoline stocks falling 4.3 Million barrels and distillates dropping 2.7 Million barrels yesterday afternoon. Bloomberg’s fuel inventory estimate shows product draws as well, but more seasonal with gasoline stocks falling 400,000 barrels, and distillates down 1.5 Million barrels. Analysts at Commerzbank in Frankfurt, in a note, to their clients, are confirming that “[t]he surprisingly marked decline in stocks of oil products despite a higher level of crude oil processing points to robust U.S. exports of gasoline and distillates.” NY Harbor cash prices for #2 heating oil continues to tighten.  Currently, NYMEX Crude is up 42 cents to 93.79, NYMEX Diesel is up 72 points to 2.8713, and NYMEX Gasoline is up 3.58 cents to 2.5519.

Stronger heating oil demand may be taking hold as cold weather rolls into East

November 05, 2013

Currently oil markets are down with NYMEX Crude trading down $1.01 cents to 93.62, NYMEX Diesel  down slightly 15 points to 2.8726, and NYMEX Gasoline slightly down as well 11 points to 2.5274.  The oil markets, specifically distillate products, appear to be consolidating from previous selling yesterday and last Friday, in anticipation of tomorrow’s DOE Inventory Report. Last week, the DOE Inventory Report showed total distillate stocks now stand at a 15.5% deficit to the 5 year average, and with cold weather rolling into the East, the fundamental picture of stronger heating oil demand may be taking hold. NY Harbor cash prices for #2 heating oil continue to display signs of  tightening v. ULSD with the spread between the two products of only 1.15 cents. The NY Harbor #2 heating oil cash price is one cent under the NYMEX while ULSD is 15 points over its NYMEX contract. 

Petroleum market prices down - gas prices lowest in two years

November 04, 2013

Petroleum market prices entered the month of November weakly, reversing all of the strength seen prior to Halloween and setting new multi-month lows on the trading charts.  WTI crude oil begins trading this morning with a $94 handle, a 4-month low.  Chart watchers see some support coming from the $90 to $95 range the market was stuck in for the first half of 2013, but are wary of the fact that the two year price range has a low end of $85.  ULSD futures have a similar story.  After collapsing 8.5 cents on Friday, NYMEX values are off another 2-cents this morning and are at 4-month lows.  At $2.86, the contract is only 6-cents above its 2-year trading range low, and many pundits see no reason why the market could not revisit that neighborhood soon.  Some readers may be interested to know that cash values for high sulfur heating oil in New York Harbor have erased most of their deficit to the ULSD contract as temperatures have declined in the Northeast.  Friday’s physical market valued those high sulfur distillate barrels at roughly a penny below cash market ultra-low sulfur diesel. 

Gasoline price levels are more extreme than distillate.  After plummeting nearly 9-cents Friday, the RBOB contract begins this week just above $2.50, a level we haven’t seen in 2-years!  The end of 2011 was the only time in the past 3-years RBOB futures have traded below the $2.60 to $3.20 range.  With current values now exceeding the low end of that range, the contract may attract more attention than normal from the “technical” crowd looking for a long term breakout to follow.