This morning, January WTI is up $0.71 to $42.42 and both heating oil and RBOB are trading positive up $.0317 at $1.3841 and up $.0255 at $1.4160 respectively. Let’s see if these early morning gains can help rebound from the losses incurred at last week’s close. This time of year we typically see heating oil trading at a premium to RBOB, (autumn, winter, harvest season), however, after last week’s significant losses, front month January ULSD is trading below RBOB futures for the first time since August. Analysts attribute this inversion to both the global oversupply as well as higher-than-usual temperatures here in the U.S. RBOB, on the other hand, continues to rise as this morning’s gains already outweigh last week’s losses. However, the New York Harbor cash market may see a drop in spot RBOB and CBOB prices in the near future as the Irving Oil refinery returns to full production.
Thanksgiving weekend is considered the biggest travel weekend of the year, and this year's automotive travelers cashed in on huge discounts. With gas prices at the pump at their lowest levels since 2008, the majority of the U.S. (roughly 75%) paid less than $2.00/gallon at fill-up. “The market no longer fears a geopolitical price rally,” Tom Kloza, global head of energy analysis at OPIS reported to the NY Times. He believes low prices are here to stay and we can continue to cash in on savings at the pump into 2016.
Over a year ago, OPEC opted to continue its high production of crude oil to protect market share and bully out non-cartel producers, such as the U.S. Later this week, Friday December 4th, OPEC will once again meet to discuss its plans. The general consensus as of now is that it will not cut production even as imminent Iranian oil is in the forecast to flood the market in the coming months.