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Pipeline Problems Persist

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The Colonial Pipeline main gasoline line ("Line 1", which delivers product from the Gulf Coast through the south) remains shut, though there are rumors of a limited restart later this week. To help with the potential gasoline shortages, CPL announced Monday evening that gasoline will soon begin shipping on the main distillate line ("Line 2"). Timing and volume of this temporary switch remain cloudy. While shipping gasoline on the distillate line will help shore up some gas problems, it may also create some diesel noise by limiting supplies of that product.



Monday's price action reverted to "risk on" mode again, with prices moving higher in tandem with strong equity markets in North America. The market still remains in the similar range near $45, however, and even the occasional large day-to-day price swings don't seem to net out to more than a few dollars away from that benchmark. This week's Department of Energy inventory summary will be viewed quite heartily to see if last week's large stock draws were storm-related anomalies or perhaps the start of a trend that would help reduce some of the massive product overhang.



October WTI gained 41-cents on the day and settled at $46.29. Finished products, RBOB and Heating Oil, were up as well (three cents for RBOB, one penny for HO). That said the real action is in the South and the uncertainly behind Colonial Pipeline, its functionality and future product deliveries.



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