Demand Destruction

By: Mike Dombroski / September 14, 2018

Oil prices are trading lower today primarily because our industry is looking at the weakening Hurricane Florence more so as petroleum demand destruction rather than a supply disruption event.

NYMEX prices sold off yesterday and are continuing to do so today because Florence struck the Carolina coast as a category 1 hurricane, compared to estimates earlier this week which forecasted landfall as a category 3 or 4. As a result, traders are treating this as more of a demand destruction event rather than a supply disruption. The idea is that demand will still be hampered in the storm’s path for the next few days, but the likelihood of a petroleum supply disruption, particularly to the Colonial pipeline, is lessened than what was forecasted just two days ago. However, supply disruptions are still entirely possible due to the rain and storm surge impact which are difficult to forecast. We encourage our Southeastern customers to touch base with us early next week so we can assess the physical supply situation and help with your petroleum needs.

Florence

We know Florence is the focus right now, but next week we’ll be watching the track and development of Tropical Depression Issac. The storm has weakened over the past few days, but its track will take it just southwest of Jamaica Monday, with the potential of going towards the Gulf of Mexico late next week.

Issac

October WTI is trading lower by $0.13 to $68.46/bbl, RBOB is off by $0.0225 $1.9677/gallon, and ULSD is lower by $0.0202 to $2.2033/gallon.


Categories: hurricane florence, supply disruption, supply demand, Oil & Gas News


Mike Dombroski

Written by

Mike Dombroski


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.


Comments

Subscribe to our blog

Price Feed

Stay up-to-date on current fuel prices and market trends with our NYMEX price feed (15 minute delay to the live market).

© 2018 Market data provided and hosted by Barchart Market Data Solutions. Fundamental company data provided by Morningstar and Zacks Investment Research. Information is provided 'as-is' and solely for informational purposes, not for trading purposes or advice, and is delayed. To see all exchange delays and terms of use please see disclaimer.

Categories

Contact Us