Quick News Fill-Up

By: Daniel Guttman / December 3, 2015

  1. EIA released its weekly statistics yesterday. The report showed a crude build of 1.2 million barrels (428,000 barrels in Cushing). Crude inventory nationally is currently 1.5 million barrels below the highest storage volumes in history. In the refined products, there was a build of 3.1 million barrels of distillates, and a build of 135,000 barrels of gasoline. Front month WTI futures closed below $40/barrel yesterday for the first time since late August.
  1. New York Harbor is providing a perfect example of the basic principles of supply and demand. In the gasoline sector, product is tight as evidenced by the highest price east of the Rockies. NY Harbor gasoline is supplemented outside of local production via two fashions; the first is imports from Europe or other sources and the second is from the Gulf Coast via the Colonial Pipeline. Currently, harbor prices for gasoline are not high enough to encourage European shipments and the Colonial Pipeline is allocated, thus preventing extra barrels from entering the market.  Demand for gasoline has remained constant and therefore it is expected that prices will continue to remain strong until a price encourages enough imports for the supply/demand curve to level off. Conversely, the distillate market is facing seemingly opposite market conditions. Extremely high inventory levels, low prices and declining domestic demand may force exports out of the Harbor. The two largest contributing factors to the distillate situation are the late onset of winter and contango conditions in the futures market over the past few months.
  1. The big looming specter of tomorrow’s OPEC meeting in Austria has provided grounds for the current price volatility in the futures market. The focus of this meeting will be current production and production plans for the future. As the increasing worldwide supply of crude has driven down prices, there has been pressure from the smaller OPEC counties for a unilateral cut in production in order to reduce global supply and raise price. OPEC is pushing for all producers (both OPEC and NON-OPEC) to agree to these cuts. Currently, the biggest objection inside of the OPEC camp is coming from the Iranians. Iran objects to cutting production now that its global export sanctions have been lifted, and wishes to ramp up its own production to boost its economy.


Categories: Daily Market Update

Daniel Guttman

Written by

Daniel Guttman

With a background in wholesale and commercial sales as well as pipeline scheduling, Daniel is currently the Manager, Business Development in the Card Access Fuels department. He is tasked to find new and innovative solutions to increase sales opportunities for the sales team while managing and evaluating internal department processes. He assists with day to day personnel management, customer data analysis, as well as the daily Pacific Pride inventory and pricing direction.

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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