If the Oil Complex Had a Theme Song This Week it Would be…..

By: Greg Gill / March 2, 2018

 

“I’m going down, down, down, down!”, the classic Bruce Springsteen song.

On Monday, HO opened up at $1.9772/gal and as of late this morning it has traded near the $1.8600/gal level.   RBOB opened Monday at $1.9945/gal and today is trading near $1.8600/gal.  Both refined products have dropped more than $0.10 this week.  

Factors that have contributed to the sharp drop include:

US Production 

  • Weekly U.S. crude production reached a record high of 10.283 million barrels a day. “Concerns are rising that surging U.S. oil production alone, may cause the global market to shift from a roughly balanced dynamic to a surplus,” said Tyler Richey, co-editor of the Sevens Report. According to EIA data, at the current pace, U.S. oil production will rise to more than 11 million barrels a day by the end of 2018.  

 Crude Builds  

  • U.S. crude stocks rose faster than expected last week, with a build of 3 million barrels compared with estimates of a 2.1 million barrel build. Gasoline had a build of 2.5 million, which is unusual this time of the year during refinery maintenance season.

Trade Wars

  • U.S. plans to impose tariffs of 25 percent on steel imports and 10 percent on imported aluminum have weighed negatively on the equity markets and commodity markets. There is concern that major trade partners China, Europe and Canada might retaliate with trade tariffs which would lead to inflation and trade wars.

Budget conscious distillate consumers may find some value anywhere near the $1.8500/gal in the HO for April delivery.  Especially if the market holds above that level today.  Another support level in HO worth noting, is the 200 day moving average of $1.8239/gal.

 HOImage.png

 


Categories: Daily Market Update, Industry Update, Heating Oil, US crude, Company Update


Greg Gill

Written by

Greg Gill

I’m passionate about fully understanding my customers’ fuel operations and the fuel markets in which they operate. I want them to view me as their fuel expert. To develop strong, trusting partnerships with customers, I have to provide them with meaningful and timely information to ease the challenges of making smart fuel decisions, allowing them to focus on their core business.


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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