Thursday September 13, 2018
Prices eased today, offsetting some of the strong gains from early in the week, as the East Coast braces for Hurricane Florence. Wednesday’s inventory summary was fairly neutral, with a large draw in crude oil stocks met with builds in the products. Finished product demand was softer, a bit unusual given that the data included Labor Day weekend, but recent reports had shown extremely strong demand results.
OPEC also suggested that global oil demand was slowing down. This didn’t directly refute the International Energy Agency’s earlier report that suggested global oil supply was shrinking, but it was certainly a more bearish headline. In general, the steep drop was probably related to some short term selling after the early week price advance.
Hurricane Florence’s path continues to change and to mystify. It now appears that the storm will head inland for a bit before turning right and heading up through central Virginia (after a few days). This is a significantly different path from previous reports, which had Florence going more South and through Georgia (as a tropical depression). Many oil terminals through North Carolina, South Carolina and Georgia have shut, or will soon be shutting. So far, Virginia terminals appear to be staying open. Pipeline operations are running normally, though we are starting to see some delays in deliveries.