The oil complex is trading much higher this morning due to a flurry of bullish headlines: increased chances of a federal stimulus package, weaker dollar, oil strikes in Norway, and the development of Tropical Storm Delta.
The onset of COVID-19 ravaged the oil industry and put an abrupt stop to the longest bull market run in history. Oil and gas companies are making massive cuts to combat the low demand as a first step to recovery.
As we head into the month of August, the New York Mercantile Exchange front month futures shifts to September. When we think of September we think of the fall and the seasonal changes to gasoline specifications. While the price spread between the expiring August contract (summer grade) and the October contract (reflecting higher reid vapor pressure) is over $0.20 per gallon. Will the market prices go down as the spread suggests?