Wednesday November 9, 2016
Markets were fairly quiet on Tuesday, as many still had their eyes on political spheres, both nationally and locally. After a heavy few days of energy news, topics such as the Colonial Pipeline, OPEC, and refinery issues faded. Futures spent most of the day oscillating on either side of Monday's settle. As a result, yesterday's settles were not too far from those the prior day.
Front month WTI continues to fail to break through the resistance level of $44.50, having fallen significantly over the past week. While outright price was fairly quiet, market structure was fairly active. Heating Oil future spreads saw several months make new recent lows. This comes as the market continues to be well supplied on inventory, and thus far, we have seen a warmer than normal start this winter. The Mar17'/Apr17' spread was down over 30% yesterday, reaching its widest contango since February of this year.
The main piece of energy news was the afternoon release of the API weekly data. It showed another large crude oil stock build, with this week's being 4.4 million bbl gain. Despite this build, both gasoline and distillate saw sizable draws (3.6 million bbls and 4.3 million bbls respectfully). Market participants will look to today's Department of Energy's data today for confirmation of these numbers.
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