Wednesday June 15, 2016
Oil prices slid for the fourth consecutive session on Tuesday, the first four-day losing streak in nearly two months (that streak coincided with OPEC’s now infamous “Doha No-Ha”), with European economic worries again maintaining a presence at the forefront of market eyes. WTI peaked above $51 last Wednesday (post-DOE data) but has steadily fallen since then on new and, somewhat surprising, already persistent demand concerns. The British vote on whether to remain in the European Economic Union is next week, and it may be a harried price week for oil until that event occurs.
Like the last few days, oil was in the red all day long and only a late session rally prevented the daily losses from being larger. To that end, it is a bit surprising that the market has continued to weaken, as end of day movements often portend the next day’s direction. July WTI lost 39-cents on Tuesday (settling at $48.49), and is down over three dollars in this four day swoon. Aside from the Wednesday morning DOE report, which is expected to show domestic crude oil stocks drew by two million barrels, Thursday is option expiration day for WTI.
RBOB and Heating Oil each lost a bit more than a penny, but those also closed higher than where they traded most of the day. RBOB is down a cumulative 10-cents since last Wednesday. The DOE report that day reported a surprisingly large gasoline stock build, which has certainly triggered the bigger-than-the-rest RBOB price gak (technical term). Even the gasoline cash market in the Midwest (Chicago, in particular) eased on Tuesday, with cash differentials falling by over a dime for some products.
Published by PAPCO, Inc. (PAPCO)
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