9/23/2015 Market Update

By: Angela Agostinone / September 23, 2015

Yesterday’s trading session ended with crude closing down $0.85/bbl to $45.83 on Oct expiry, RBOB up $0.0133/gal to $1.4164 and HO up $0.0180/gal to $1.5320. Last week, WTI was $1.24 less expensive at $44.59, RBOB was $0.0835/gal less expensive at $1.3329, and HO was $0.0320/gal less expensive at $1.50. Currently, WTI and both refined product futures are trading higher than yesterday’s settlement prices.

Product futures fell at the beginning of yesterday, but recovered and closed up after news of a Colonial pipeline closure. The Colonial pipeline had to shut down a line with an 850,000 bpd capacity to carry gasoline and distillates from North Carolina to its New Jersey hub. The line closure was to investigate odors of gasoline in Virginia, as reported by Colonial.

colonial_plThe Colonial Pipeline begins in Houston, Texas and ends in Linden, New Jersey.

OPEC is predicting bullish crude prices, with U.S. production falling and strong demand. They assume crude prices will rise to $80/bbl by 2020. Evidence of declining U.S. production can be seen in the falling U.S. rig count. Baker Hughes reported the number of operating U.S. rigs has fallen from 1421 at the beginning of the year to 644 last week. The peak of operating rigs occurred in October 2014 with 1609 rigs.

The increase in the market is a reflection of the data released by the API last night. The API data released show that U.S. crude inventories had a 3.7 million barrel draw, 490,000 barrels of which was in Cushing, OK. There was a build in gasoline of 2.2 million barrels and a build in distillate of 300,000 barrels. This was supported by DOE numbers today that have the market rallying further on a surprise crude draw and large distillate draw. The DOE statistics show crude inventories had a 1.9 million barrel draw, 462,000 barrels of which was in Cushing. Gasoline inventories had a build of 1.3 million barrels and distillate inventories had a 2.1 million barrel draw; however, PADD 1B distillate inventories had a build of 224,000 barrels.

9_23_settles


Categories: Daily Market Update


Angela Agostinone

Written by

Angela Agostinone

Angela manages daily price changes from suppliers to ensure Guttman Energy customers are getting the most current and competitive rack prices. She is also responsible for relaying supplier product allocations to Guttman Energy's sales and logistics team, as well as analyzing specific benchmarks such as OPIS, Platts, and Argus to ensure each customer is getting the greatest value from their contracted fuel purchases.


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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