Many traders are holding onto their long positions as they prepare for the worst that Hurricane Matthew has to offer. A few other key pieces of news today include the strength of the dollar and Iran/Libya’s production levels. Even though the dollar looks strong today and Iran/Libya continue to increase production, oil prices remain somewhat stagnant for the time being.
Some analysts are expecting to see a 2.7 million-barrel rise in crude stocks for the week ending September 30. This could be bearish, but keep in mind that distillates are expected to show a draw of approximately 1.4 million barrels.
For those of you who reside on the southern U.S. Atlantic coast, you should start to prepare for the worst case scenario in regards to fuel availability. If you own a fuel tank, it may not be a bad idea to fill it up before the end of the week. If you are worried about supply problems and product outages, take all the steps that you can to ensure you have access to fuel during this time.
If you utilize third party fuel haulers, be sure to reserve truck capacity in advance with your designated carrier/carriers. If you want to be certain that you have access to fuel, you may want to speak to your vendor about different ways you can secure product. I look at this as a lesson for simple supply and demand; if there is little-to-no supply or truck capacity, then demand will be high, thus driving up the price.
As of 11:20 a.m. ET, heating oil is relatively flat, while RBOB is up approximately 3 cents.
API stats come out tonight, stay on the look out!