Oil prices are trading lower for a 2nd straight day after the Saudi’s threw a little cold water on the OPEC production cut talks, and technical momentum has stalled.
After reports last week made an extension of the OPEC cuts feel like a foregone conclusion, the Saudi minister said it was “too soon” to make that call, which appears to be a driver behind the recent pullback in prices.
Now that WTI stalled out just below the $54 mark, there’s an argument to make that we’ll test the $51 mark as a 38% retracement of the 2 week rally.
Monday was the first that spot market assessments for gasoline across much of the East Coast reflected only a summer-grade gasoline spec, causing most racks to see increases of about a dime. The decline in futures over the past 5 sessions has diminished the impact of that seasonal switch, but it will no doubt push the weekly retail averages higher after they reached their highest levels in a year last week.
Ethanol RINs continue their quiet trade, hovering between 53 and 55 cents over the past several weeks after a wild ride ever since the presidential election. With the RFS suddenly seeming like a low priority item for the administration, it seems like RINs may continue with their quiet time until some new legislation rumor sparks the next move.
A lawsuit filed by BP against Monroe Energy (the fuel arm of Delta Airlines that operates the Trainer PA refinery) a last week sheds some light on the challenges East Coast refiners have faced in recent years as they struggle to overcome the logistics of the changing supply/demand balance for crude oil globally.