No Help on the Demand Side, Either

By: Angela Agostinone / December 9, 2015

Yesterday, crude closed down $0.14/bbl to $37.51, HO closed down $0.0204/gal to $1.2592, and RBOB finished down $0.0058/gal to $1.2036.  Despite WTI crude closing at $37.51, during Tuesday’s session it dropped below $37/bbl for the first time in six years.  The low prices are a result of the global oversupply and OPEC’s decision to not cut production for 2016.  A small additional factor in the bearish market conditions is the El Nino weather pattern.  The unusually warm November and December has caused drastically lower demand for heating oil and natural gas.  The forecast for the rest of December continues to show warm temperatures.  Hopefully, La Nina follows the El Nino, making January and February extremely cold to make up for the lost demand for this year’s winter heating season. 

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Crude is currently trading up this morning, in response to the API data released last night.  The API showed a draw of 1.9 million barrels of crude inventories. There was a build in gasoline of 2.7 million barrels, and a build in distillates of 5.6 million barrels.  The draw in crude was confirmed in the DOE stats released today at 10:30 AM, making this the first decline in eleven weeks. The DOE report showed a draw in crude of 3.6 million barrels, but a slight build of 423,000 barrels in Cushing.


 

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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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