As Houstonians are in the midst of a rebuilding process not seen since Hurricane Ike, and Gulf Coast refineries slowly rumble back to life, Floridians, 6.4 million of them without power, are in the early stages of assessing damages from Hurricane Irma. Irma’s high winds and storm surge have claimed many lives and have destroyed many island nations. As powerful events like Harvey and Irma rampage through a two week span, WTI Crude Oil has only seen a high/low range of $3.84 during that time frame. Reformulated Blendstock for Oxygenate Blending (RBOB), for October delivery, had a high/low range of $0.2207 and Ultra-low-sulfur-diesel (HO), had a high/low range of $0.1727 during those two weeks. As of 12:15pm EST, WTI for October delivery is up $0.18 at $48.24, RBOB is up $0.0159 at $1.6504, and HO is down $0.0057 at $1.7370.
With supply and demand battling it out during this tumultuous time frame, rebalancing is still at the forefront for the OPEC delegates. This morning, OPEC forecast higher demand for its oil in 2018, up 410,000 bpd from its previous forecast, and pointed to signs of a tighter global market. With Brent crude prices for immediate delivery currently in backwardation vs later month supplies/pricing, rebalancing hopes are raised going forward. Backwardation coupled with top producer Saudi Arabia cutting output to 9.951 million bpd in August from 10.01 million bpd in July, perhaps the “re-balancing act” is in the cards for the energy markets. For now, we await a clearer picture on inventories post storms with APIs this evening and DOEs tomorrow. Below are estimates for DOE stats from Reuters and Bloomberg:
Crude: 2.3 million 3.977 million
Gasoline: (2.4 million) (2.114 million)
Distillates (1.7 million) (1.274 million)