Tuesday September 20, 2016
Colonial Pipeline (CPL) continued it's "Line 1" bypass work over the weekend and into Monday, with the same end of week forecast for re-start of the main gasoline line. Gasoline shipments are ongoing, albeit at very slow rates, on "Line 2". Delivery schedules are accordingly pushed back through the entire system. CPL is active with updates, though understandably there is quite a bit of uncertainly on repairs, timing and supply.
The NYMEX was fairly quiet on Monday, with only RBOB standing out among the energy products. However, in Monday's session, unlike much of last week, RBOB was clearly the weakest performer and closed with a substantial day loss. The market structure also softened, with the backwardation coming off significantly.
October WTI, which expires today, posted a 27-cent gain and settled at $43.30. With small advances the past two days, WTI has held near the bottom of the six week trading range. The November WTI contract is roughly 50-cents higher than October.
RBOB posted a four cent loss (after a 10-cent gain last week), on short term profit taking and easing East Coast supply concerns. The front of the RBOB curve, and its structure, rallied heavily last week after the CPL news, with fears that gasoline shipped in the Pipeline would not reach New York Harbor (instead, those barrels would stay in the product starved south). Those fears abated a bit on Monday. Though with the volatility in the market and in spreads, it is certainly anyone's guess as to what the true market value is for East Coast gasoline.
Colonial Pipeline will continue to publish updates as necessary on the progress of the bypass and the delivery schedule of inline product. Continue to visit here (papco.com/blog) or sign up for an email of these daily summaries, or visit the Colonial Pipeline website directly.
Published by PAPCO, Inc. (PAPCO)
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