Fundamentals at the Forefront

By: Peter Haralambakis / October 4, 2017

As we enter a, historically, lack luster 4th quarter in the energy sector, the recent meteorological events coupled with a potentially quicker than anticipated rebalancing of the global crude supply glut by OPEC, we can only digest today’s Department of Energy’s Weekly Petroleum Status Report and accept the fact that the current environment is certainly not the norm.  Crude inventories fell by 6 million barrels, Gasoline stocks built by 1.6 million barrels, and Distillates drew by 2.6 million barrels.  Based on that data you would think the next pieces of information I would provide in regard to the markets would be:  “WTI up a certain percentage and RBOB down a certain percentage.”  But to no avail, WTI for November delivery is down 1% at $49.94 and RBOB for November delivery is up 0.83% at $1.5785. 

Chart-QCLX17_1 Day.jpg

Even a continued increase in crude exports cannot keep WTI in the plus column today.  U.S. exports have become more attractive to buyers because of the current discount to Brent at around $5 bbl.  As OPEC and Non-OPEC countries gather in Moscow this week to further discuss how well the production cuts have gone, we in the states have our eyes on, yet again, another potential disruption to our ship channels, refineries, and crude oil platforms in the Gulf of Mexico.  Tropical Depression Sixteen is currently on path to hit the states, potentially as a hurricane, as early as Sunday. 

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For now, we can only wait and see if the historic fundamentals finally get their turn behind the wheel or will the latest dynamic of continued tightness in our refined products continue its path redlining in sixth gear till the holiday season. 

Categories: Daily Market Update

Peter Haralambakis

Written by

Peter Haralambakis

Peter Haralambakis is a Supply and Trading Business Development Manager at Guttman Energy with over 13 years of experience in commodities trading, analysis, and risk management in products ranging from Corn and Soybeans to Crude Oil Futures and Options to Financial and Physical Biofuels to Natural Gas and Natural Gas Liquids.

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