Gasoline prices have stolen the show this week, as we’ve seen strength in futures and cash markets, along with time and crack spreads, at a time of year when gasoline tends to lag the rest of the complex.  A variety of refinery and pipeline issues, along with strong export flows and relatively soft imports all seem to be contributing to the gasoline strength, while the rest of the energy complex is showing signs of topping out.

Chicago spots have been on a roll all week after the Explorer pipeline was shut down for maintenance, but look like they topped out Thursday.   Meanwhile, NY Harbor spot RBOB was strengthening with prompt barrels trading 6-9 cents over the December screen, which is an unusual occurrence for this time of year when winter specifications allow for more liberal use of various blending components and thus increases supply.  For perspective, the NYH barge market was only trading at 10 cents over the screen this time last year after the Colonial pipeline had an explosion, and shut down deliveries completely for a week.

A rash of fires at various refineries this week certainly seems to be a catalyst for the unseasonal strength in gasoline, with reports Thursday that the fire at Baton Rouge which was at first shrugged off by gulf coast traders may have caused more extensive damage to a reformer unit critical to making finished gasoline than originally expected.

The October jobs report showed a healthy recovery in US payrolls as the country bounced back quickly after the hurricane-induced declines we saw in September. According to the BLS, “Total nonfarm payroll employment rose by 261,000 in October, and the unemployment rate edged down to 4.1 percent.”

Jerome Powell was named as the new Fed Chairman yesterday, and US stock markets seemed to like the news.  One critical expectation is that the new chairman will work to relax banking regulations, without repealing the Dodd-Frank rules completely.  This will be a story to watch closely in 2018 as the banks activity in energy markets has been a dominant price mover before the FED restricted their activities in the past few years.

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