8/18/2015 Market Update

By: Daniel Guttman / August 18, 2015

The downtrend continues, as WTI has a lower technical objective of $39.44 if trades stay below $42.03.    US Crude futures hit an intra-day low of $41.42 yesterday, which has not been seen since early 2009. A Reuters poll has predicted U.S. commercial crude oil and gasoline inventories will fall by 600,000 bbls and 1.5 million bbls respectively in the latest week. U.S crude stockpiles are expected to rise as refineries prepare to reduce operations for maintenance season. Heat’s $1.5212 objective still remains in place while RBOB has a lower targeted support level of $1.6230 if trades stay below $1.6722.   

The same news that has troubled this bearish market still lingers. Refinery issues in the Midwest have been, and will continue to, reduce supply of gasoline and diesel fuel; spiking prices at the rack and at retail stations, while enabling arbitrage between racks further east. Crude continues to build at Cushing and further downward pressure on WTI as well as BRENT prices will happen with noise of OPEC’s production potentially reaching 33 million bpd next year.

Chinese stock markets continue to plummet falling more than 6% on Tuesday. There is concern that China may devalue its currency again which could negatively impact China’s consumption of import products. In a global market where supply already is outpacing demand a downturn in the world’s leading energy consumer could add downward pressure on oil prices. 

Reports from Kuwait’s state-owned oil company are indicating that the Shuaiba refinery is expected to be back online within the week after being shut off yesterday due to a fire. Exports of petroleum products were not affected.

According to the U.S. National Hurricane Center (NHC), there is a 90% chance of a tropical cyclone forming over the next couple of days a few hundred miles west-southwest of the Cape Verde Islands in the Atlantic Ocean. Cape Verde is several hundred miles off the western coast of Africa.    

Although the U.S. continues crude production and OPEC currently shows no signs of regress, bullish sentiments have found their way into the market. In fact, the IEA reported its forecast of global demand to have grown from 200,000 bpd to 1.6 million bpd which is the best in five years.

Categories: Daily Market Update

Daniel Guttman

Written by

Daniel Guttman

With a background in wholesale and commercial sales as well as pipeline scheduling, Daniel is currently the Manager, Business Development in the Card Access Fuels department. He is tasked to find new and innovative solutions to increase sales opportunities for the sales team while managing and evaluating internal department processes. He assists with day to day personnel management, customer data analysis, as well as the daily Pacific Pride inventory and pricing direction.

Guttman Energy Daily Market Update Disclaimer – The information contained in this market update is derived from sources believed to be reliable; however this update could include technical inaccuracies or typographical errors and Guttman Energy does not guarantee the accuracy, completeness or reliability of this update. FURTHERMORE, THIS UPDATE IS PROVIDED "AS IS," WHERE IS, WITH ALL FAULTS AND WITHOUT ANY WARRANTY OR CONDITION OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY. GUTTMAN ENERGY ALSO SPECIFICALLY DISCLAIMS ALL EXPRESS AND IMPLIED WARRANTIES. YOU USE THIS UPDATE AT YOUR SOLE RISK. This update and any view or comment expressed herein are provided for informational purposes only and should not be interpreted in any way as recommendation or inducement to buy or sell products, commodity futures or options contracts.


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