Oil Markets: Is This the Calm Before the Storms?

Main Image
Daily Settlement Prices

The oil market ended a relatively uneventful week uneventfully. That even though Fed Chairperson Janet Yellen's speech in Jackson Hole, Wyoming suggested interest rate hikes are very much on the horizon in the United States. Using the term "full employment", Ms. Yellen's remarks have led most financial gurus to believe the Fed may raise rates by the end of the year (for the first time in a year). Such action would make the dollar much more valuable and, in turn, cause a negative price reaction from commodities. Her remarks began at 1000am EST on Friday, and there was a two minute window early in her speech where oil moved up and down by over dollar each. Despite that significant flurry, this particular summer Friday's price action remained uneventful.

On the horizon, however, oil watchers are still casting an eye towards the tropics and a few different storm systems. A large storm in the Gulf of Mexico would threaten supply, whereas a large storm moving up the East Coast would threaten demand.

2 Day Tropical Outlook 082916

October WTI posted a 31-cent gain on Friday (settling at $47.64), though the contract was down a dollar for the week. That figure remains relatively close to the recent market highs, but recent gains remain tenuous if interest rates and dollar moves become the main price driver for oil.

RBOB (flat) and Heating Oil (down a penny) also did nothing on Friday or for that matter, really, for the week. Cash markets (i.e. regional rack prices) are most in focus now, rather than NYMEX moves, because of the upcoming gasoline RVP-switch (summer grade to fall / winter grade) and the associated over / (under) supply with that transition.

082916 Weekly Pricing Graph

Published by PAPCO, Inc. (PAPCO)

PAPCO Newsletter Disclaimer. The information that is published in this newsletter, including the market reports, is derived from trade, statistical, and other sources that we believe are reliable and accurate. However, PAPCO does not guarantee the completeness, accuracy, or reliability of such information, and information should not be relied upon as such. Additionally, PAPCO assumes no responsibility for the material contained in the newsletter and the views expressed therein. Further, PAPCO expressly disclaims any express or implied warranties or guarantees with regard to such information. The information contained in this newsletter and any views expressed herein are provided for your informational purposes only and should not be interpreted in any way as an offer, invitation to make an offer, inducement, or recommendation to buy or sell options contracts, commodity futures, products, or any other type of security.



Post Comment

Commercial Price Risk Mgmt Lubricants Retail Home Heat About Us
Fuel Products
Fleet Card
Energy Markets
Manage Risk
Custom Solutions
6 Easy Steps
Pricing Tools
Weekly Updates
Inventory Mgmt
Branded Fuels
Unbranded Fuels
Custom Solutions
Site Development
C-Store support
Inventory Mgmt
Pricing & Incentives
Delivery Options
Service Programs
Price Protection
Service Areas
News & Events
Contact Us

Sign up for
Email Updates


4920 Southern Blvd
Virginia Beach, VA 23462

© Copyright 2019

Site Map
Privacy Statement
Terms & Conditions