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Macro Price Movements Take a Back Seat to East Coast Supply Issues

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Due to delays in locating and fixing the pipeline leak in Alabama, Colonial Pipeline announced yesterday that "Line 1" would not restart operations until next week (in lieu of starting sometime this weekend). "Line 2" gasoline service has begun, in limited quantities, but the product deliveries in all locations will continue to be pushed back in the coming days (weeks). Read more

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Colonial Pipeline Supply Flows Slowly

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Colonial Pipeline announced Wednesday that limited volume of gasoline has begun to pump on "Line 2" (previously distillate-only pipeline). The company also said roughly 6,000 barrels of gasoline had leaked from "Line 1", though extraction and repairs to the pipeline have not yet begun (safety concerns). Pumping rates have slowed and delivery times have been adjusted (backwards) to reflect the issues in combining products into one main pipeline, and the lack of pressure (flow) that physically pushes the barrels north through the pipeline. Read more

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Colonial Pipeline Updates Supply Flow

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Colonial Pipeline issued several updates on Tuesday. Gasoline will be shipped on "Line 2" (previously distillate only line) in the near term to help alleviate gasoline supply concerns in the Southeast. Colonial "Line 1", the pipeline which suffered the leak in Alabama, may begin limited movements in a few days. The situation is still very fluid, what with the multiple updates and ingenuity of the pipeline shift plan. What we do know is that "Line 1", which transports over a million barrels of gasoline per day, has been shut for five days. The total loss of gasoline through the system (PADD I) is not an insignificant number and will continue to grow even though Colonial is making great efforts to alleviate the loss. Read more

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Pipeline Problems Persist

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The Colonial Pipeline main gasoline line ("Line 1", which delivers product from the Gulf Coast through the south) remains shut, though there are rumors of a limited restart later this week. To help with the potential gasoline shortages, CPL announced Monday evening that gasoline will soon begin shipping on the main distillate line ("Line 2"). Timing and volume of this temporary switch remain cloudy. While shipping gasoline on the distillate line will help shore up some gas problems, it may also create some diesel noise by limiting supplies of that product. Read more

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Southeast Supply in a Chokehold for Near Future

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Late on Friday afternoon, Colonial Pipeline (CPL) issued a notice that its main gasoline shipping line (Line 1 - Gulf Coast to Greensboro) had been shut for 'integrity issues' (i.e. most likely a leak) near its Moundville, Alabama pumping station. On Sunday, CPL issued another statement saying that line would be down for several days for clean-up and repairs. With new shipments now stopped, and in transit barrels likely delayed, gasoline supply into many Southeast locations will be delayed. Expect tight supply conditions throughout the entire system for the near future, as marketers attempt to ascertain the impact and length of the pipeline issue. Read more

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DOE Reports Massive Draw on Inventory

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Oil prices settled higher for the fourth consecutive day (and at the highest level in two weeks) after the Department of Energy (DOE) inventory summary showed a massive (but surely Hermine-impacted) crude oil stock draw. Oil stocks were reported to have fallen by over 14-million barrels, largely driven by a sharp dip in imports (down nearly two million barrels per day, week-on-week), though that is easily explainable by ships being held at sea and ports being closed in anticipation of last week’s storm. Read more

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Today's Fuel Market Report

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Prices traded in a quiet and range bound fashion on Wednesday, following the tone set on Tuesday, as prices appear to have bounced off of the late August low but are not in any hurry to threaten $50 (WTI). The front month (October) WTI contract traded in a dollar range, all round $45, and only the RBOB contract seemed to muster any strength in the market (October WTI settled at $45.50). Read more

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Summer Ending for Oil Complex Too

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Oil prices closed moderately higher on Tuesday, dismissing Monday's electronic trading volatility, but remain poised to bounce after declining towards the tail end of August. The Monday's headline grabbing news about a tacit agreement between Russia and Saudi Arabia on future oil production sent the market into a bullish tizzy, though that price surge proved very temporary. As most of the U.S. returned to their desks on Tuesday, prices were back to unchanged from Friday and didn't deviate much from that during the day. Read more

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Today's Fuel Market Report

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Oil prices ended an otherwise dreary week on a high note, rising for the first time in five days after comments by Vladimir Putin indicating an eagerness by Russia to work with OPEC on limiting oil production. Those comments, following through on similar tones by Saudi Arabia last week, could auger a semi-formal agreement between many large oil producing nations (though, certainly, many market players are skeptical on the application and follow through of production cutbacks). The bullish fervor on Friday, which saw October gain over a dollar (settling at $44.44), carried through to Monday (in electronic trading, WTI was up two dollars early in the day), though that sentiment has cooled heading into Tuesday. Read more

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