NYMEX Gets Knocked Down, But It Gets Up Again..?

By: Greg Gill / June 16, 2017

Oil prices are up slightly this morning after nearing 2017 lows, but have remained on course for a fourth straight week of losses. What’s driving these declines?

Reason # 1: The mighty OPEC cartel is being viewed as doing only the minimum in regards to cutting production.

Reason # 2: US Production remains up

Reason # 3: Data from the U.S. Energy Information Administration (EIA) this week showed increasing gasoline stocks and lower demand (despite the fact that it is currently peak summer driving season).

 

With all of this being said, why is the market bouncing off of this week’s lows today? Two reasons:

Reason # 1 (Fundamental): The market was taking “a breather” yesterday from the reports of over-production, not enough production cuts, high exports and weaker demand. The market may simply be trying to recover from this week’s losses. Tamas Varga from PVM supports this line of thinking, but he cautions that today’s up-tick in price should not be viewed as bullish.

Reason # 2 (Technical): Heating oil’s settlement price has yet to break May’s low point of 1.3748. Taking a look at the chart below you can see that heating oil is currently up near its next resistance level. In general, it’s not unusual to see a bounce after multiple down-days on refined products.

HO CONTINUATION CHART2.png

As of 12:30 PM, WTI crude is slightly below the $45 threshold and on the NYMEX heating oil is up a little over a penny, while RBOB is up a little under 2 cents. It’s important to note that heating oil and RBOB are still quite close in regards to the outright trading price for both products, which is unusual for this time of year. 


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.


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