Yesterday, WTI crude closed down $1.24/bbl to $32.73, HO closed down $0.0446/gal to $1.0807, and RBOB finished down $0.0949/gal to $1.1618. This morning HO was trading down about $0.025, however has since rebounded and is trading up about $0.01. RBOB is up about $0.0050/gal.
The Chinese stock market was shut down for the second time this week after a 7% daily down limit was hit during the first fifteen minutes of trading. As China moves to devalue the Yuan, it is feared that the second largest economy may be weaker than originally thought. As the world's largest importer of crude, China’s weakened economy, along with OPEC’s decision to produce at current levels, has increased the bearish outlook for crude.
Canadian company TransCanada is suing the U.S. over the Obama Administration’s decision to cancel the Keystone XL pipeline project, which would carry over 800,000 barrels of crude a day from Canada’s oil sands to American Refineries on the Gulf Coast. The project could sustain growth, create thousands of jobs, and introduce billions into the economy, eventually resulting in lower petroleum prices to the US. The company, suing through the North American Free Trade Agreement (NAFTA), is seeking $15 billion in damages, claiming it was unconstitutional for Congress to regulate interstate and international commerce. TransCanada is arguing that the decision to deny its multibillion dollar investment was unjustified as the decision was based on “false” discernments that international climate change could result from the project. A lawsuit has been filed in Houston asking that the decision by the Obama Administration to cancel the Keystone XL pipeline project be overturned.