Monday’s session saw refined products outperform oil as refinery issues and the storm holding off the East Coast encouraged buyers to step up, and that momentum has continued overnight, pushing prices to their highest levels since the end of May. Brent crude is also getting a boost this morning as hundreds of striking oil workers in Norway are putting north sea production at risk.
While the daily action seems to still be focused on the global crude oil show, a handful of refinery issues have cropped up around the US, with a pair of incidents in Louisiana, a power outage that effected 3 plants around Corpus Christi and a fire at a plant in California all in the past week have stirred up refined product prices, although as the charts below show, basis values have not made any large moves, suggesting these incidents to be relatively minor in terms of potential supply disruptions.
Tropical Storm Chris is still forecast to avoid the US East Coast as it makes its way north this week but it will create rough seas that could slow shipping around the NY Harbor and other ports. Although hurricane Beryl is now just a rainstorm, there’s a chance it could reform as it approaches Florida and could keep the rough seas churning along the East Coast for an extended time.
Money managers were eagerly adding to long positions in WTI for a 2nd straight week, increasing bets that prices would move higher in the wake of the Syncrude outage. Both RBOB & ULSD also saw increases in the net-length held by speculators, although their moves were just a fraction of that seen in WTI.
The EIA published a note this morning showing how China has become a key destination for US Energy exports including Propane & LNG in addition to crude oil, no doubt a message chosen for its timing as the two countries began implementing new tariffs on one another last week. US equity markets had been selling off on each new trade war rumor for months, but have surged so far this week which seems to be adding to the bullish momentum for energy prices.