Thursday July 7, 2016
Wednesday morning the energy complex reached new recent lows. The downward move was led by RBOB, which saw the August contract down as much as 4.8 cents early, and front month RBOB reached its lowest outright level since April 7th of this year. However, this early weakness did not last. WTI and ULSD were bid higher, pulling the RBOB contract along with it and ultimately seeing all three settle in the green.
The WTI settle at $47.43, puts the contract almost exactly in the middle of the recent range we have been mentioning. The post-settle market was lively after the release of the American Petroleum Institute’s (API) weekly data release. The report was highlighted by a larger than expected draw in inventories for the three major categories. The API data showed a draw in crude oil inventory levels of 6.7 million barrels, a distillate stock draw at 3.6 million barrels and gasoline inventory draw of 2.3 million barrels. This draw in inventory was bullish on outright price and drove prices to a penny plus higher than settlement for the products.
Market participants eagerly await today’s Department of Energy’s data (which will be delayed 30 minutes from its normal schedule) to see if both agree on a sizable draw.
On the Gulf Coast trading side, basis trading was more active on the gasoline side of the barrel. In part this was due in part to reports of issues with a gasoline making unit at one of the area’s refineries, which drove CBOB basis up a penny and RBOB basis up 25 points. Today is a scheduling day for both gasoline and diesel in the Colonial Pipeline system, so higher volatility and volume can be expected.
Published by PAPCO, Inc. (PAPCO)
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