If you were to ask OPEC what the future holds for crude, they would tell you how they now believe crude prices will rise to $80 by 2020 as supply falls, mostly in the United States. There is currently a major slump in drilling here in the U.S., the effects of which will have implications that reach far into 2016 and 2017. “The market’s not as oversupplied as we think it is,” David Pursell, a managing director at investment bank Tudor Pickering Holt & Co. in Houston, said in a phone interview conducted by Bloomberg. “The news out of OPEC is more bullish, U.S. production is falling and demand is great right now.”
Last week U.S. WTI crude fell and settled at $44.59/bbl, but is currently undergoing an early morning rally and even hit a pre-market opening high of $46.09. November WTI, which will become the front-month tomorrow, has picked up $1.00/bbl to $46.02. Heating oil and RBOB also fell last week, 3cts and 2cts/gal respectively, but are both trading up this morning +.0175cts at $1.5082 for Heat and +0.0455cts at $1.4017 for RBOB. In the cash market, Chicago RBOB continues to be the highest in the nation, and for our geographic region, gasoline comes at a premium, and premium prices themselves are sky high.
Late Saturday night a fire erupted at the Husky Energy refinery in Lima, Ohio. Within an hour the fire was contained and there were no injuries. Coke drums, which had been down for maintenance, triggered a fire when they were started back up. Although this was not a significant fire and will not have a huge impact on product supply, this may cause a price increase for gasoline in the Ohio markets. Something to keep an eye on over the next few days.