Monday October 24, 2016
For the week, prices posted a small gain (though a bit bigger for the RBOB contracts) and have really flat-lined since the post-Algiers surge in late September. That surge, which caused WTI to move from around $45 to $50, ended pretty quickly but sentiment hasn't pushed back enough to merit a price retreat. For example, the front month WTI contract has settled in a small, two dollar range every day for the last three weeks.
There is certainly some skepticism about whether or not OPEC will follow through with its discussed cuts, but that bearishness has offset some significant crude oil inventory draws as reported by the Department of Energy. Trading volume has been very high of late, indicating both sides digging in their heels for a protracted price battle. As such, it is not surprising prices has been rather steady of late.
The only noteworthy price change on Friday, and really of late, has been in the RBOB market. On Friday, the November RBOB contract gained nearly four cents to settle at $1.5314 / gallon (for the week, that contract was also up about four cents). The Friday settle was the highest prompt RBOB settle since late June, surprising given that peak demand season has passed. There has been some extended refinery maintenance in the Northeast, this has boosted cash values for New York gasoline. This cash strength has extended to the NYMEX.
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