Yesterday closed with Wall Street logging the biggest two day gain since the 2008-2009 financial crisis. This “slingshot” moved from the 5 to the 8, and the 8 to the 13 day moving average for all except Oct’ RBOB, moving only from the 5 to the 8. With these positive developments, WTI closed $3.96/bbl higher, Brent $4.42/bbl higher and Heating 11.51 cents/gal up. Furthermore, RBOB, despite its recent trend, has settled slightly over 10cpg higher on the day.
Phillips 66 just announced an unplanned shutdown at their Bayway refinery due to a leak in their 150,000 bpd catalytic cracker, causing a significant reduction in its processing capacity. In response to this announcement, the NYMEX front month HO contract has risen around 4cpg from its flat price earlier this morning. The refinery has not made an announcement yet on the severity of the issue or how long they expect it to be down.
Despite oil being up yesterday, Bloomberg conducted a survey of economists that showed a 65% probability that crude will remain in the $40/bbl range until the end of September, with 40% saying that prices could remain there until the end of the year. Further, 33% of the economists believe that we will see prices as low as $30/bbl.
Tropical Storm Ericka remains in the headlines with 3 killed and 25 to 30 missing in the Caribbean island of Dominica. Late Thursday afternoon, forecasters predicted that Ericka may reach the US mainland hitting Florida Monday or Tuesday; however, there is a lot of uncertainty still with its course and intensity.