Typically, you can count on Mother Nature to impact the U.S. oil market during the winter months, courtesy of extreme cold weather. So, it’s fitting that the wild, unpredictable ride of 2015 comes to a close with news from Bloomberg that the crude glut could increase as a result of…RAIN?!? Bloomberg reports that the heavy flooding in the Midwest has shut some pipelines and terminals, “potentially swelling a glut of crude and extending this year’s price slide.” Closures include Enbridge’s 200,000 bbl/day Ozark pipeline and Spectra Energy’s 145,000 bbl/day Platte pipeline in Wyoming. The Ozark runs from Illinois to Cushing, Oklahoma and its closure is expected to add to Cushing’s record high stockpiles.
These pipeline closures (and possibly others to come) have the potential to adversely impact operations at Midwest and Louisiana refineries, in terms of both bringing crude in and getting refined products out. Keep an eye on the Chicago and Gulf Coast cash markets and local racks in the coming weeks for indications of product availability disruptions.
U.S. jobless claims rose to the highest level since July, but Bloomberg reports that this may simply be due to typical holiday swings.
Wednesday’s market settles reflected the surprise crude build reported by the DOE. Crude closed down $1.27 to $36.60, HO closed down $0.0504 to $1.0791 and RBOB closed down $0.0460 to $1.2300.
As 2015 draws to a close, Guttman Energy would like to thank our valued blog readers for your continued support andour loyal customers for your patronage. We wish everyone a happy and prosperous new year!