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Another Fainting Spell for Oil Prices

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Daily Settlement Prices

Thursday energy markets fell for a sixth consecutive day, as continuing fear of oversupply, Brexit, and general price momentum continued. At Thursday’s low point, front month WTI was down almost $6 in the last six days, as the July settle of $46.21 moved further from the important $50 level. Front month WTI is now at its lowest level since May 13th.



The products were led by the ULSD complex, which saw front month futures settle down almost 5.5 cents. This is the largest down move for the contract since May 9th. While past performance is not indicative of future results, it is worth noting that the last time front month ULSD saw a similar down move (May 9th), it was followed by an upward trend in price, which lasted almost a week.



Another reason for the weaker energy complex was due to the release of the weekly Natural Gas inventory levels by the Department of Energy. This showed a build of 69 bcf, which was at the high end of the expected range, and above expectations. As a result, Natural Gas futures were weaker on the day and likely bled over a bit into other products.



The news item of note came late Thursday, as multiple reports stated the Magellan pipeline in Houston has been repaired and will begin running tonight. This should help the flow of gasoline to the Mid-West, an area that has seen volatile prices as the result of supply fluctuations. The reopening of the pipeline should also help alleviate the resulting influx of gasoline that has been seen in the Colonial Pipeline system, as suppliers will now have another direction to send product.



Published by PAPCO, Inc. (PAPCO)



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