Today’s market is reacting to yesterday’s Fed news. At approximately 2:00PM yesterday the Federal Reserve decided to leave interest rates unchanged, primarily due to global economic and financial issues, which is bearish for the U.S. dollar, but it is also bearish to commodities in general so the market is looking for direction.
During a 5 minute span before and after the announcement was made, the oil market movement was extremely volatile with many trades taking place and a lot of volume moving around. A rally, fall, rally, and then fall transpired over the next hour. Early morning gains in the market were wiped away towards the market settle. Heat closed down 1.17 cts/gal, RBOB down .6 cts/gal and WTI crude settled down to $46.9/bbl even after trading close to the $48 mark before the announcement was made.
Today we have seen early morning losses, which could just be pullback from mid-week gains when WTI settled at a September high. Currently WTI is trading at $45.33, -1.60, Heat is -.0179 and RBOB is trading -.0184.
In the cash markets we saw a drop in ULSD across the board; Chicago, NY Harbor and Gulf Coast, while refinery maintenance in the Gulf Coast have propped up CBOB values. Weak spot and rack prices are continuing to pull street prices lower and the U.S. retail average is currently dipping below $2.30/gallon. Three southern states actually have prices below $2/gal and a handful more may follow.