We’re getting more selling in gasoline and diesel futures to start the week, following through on the sharp declines to end last week. Both ULSD and RBOB futures are around 1% lower this morning, while WTI is trying to hold onto small gains. From a chart perspective, the energy space is nearing critical support levels, that could bet the difference between getting a price bounce in the next few days, and seeing another 5% or more in losses.

It’s hard to say if Friday’s sharp losses were more a sigh of relief that Hurricane Nate was going to be a relatively minor event, or a wave of panic at the first monthly decline in US jobs in years. Most likely, it was some of both. Refined products are once again leading the push lower as it now seems Nate will do more damage to refined fuel demand as it dumps heavy rain across large swaths of the country, while its impacts on supply appear to be minimal.

Roughly 90% of offshore oil production was shut in ahead of the storm, and early reports suggest employees were already returning and beginning to bring that production back online. The LOOP was also said to have avoided damage and returning to service. The Chevron refinery in Pascagoula was just 30 miles to the east of Nate’s landfall, putting it near some of the worst winds and storm surge. There have not yet been reports on whether that plant, rated at 370md/day suffered any damage.

The net long positions held by money managers were little changed last week. Brent and ULSD positions held near their multi-highs, while WTI and RBOB saw modest reductions. With the heavy selling that we saw Friday and so far today, we may see further reductions in these positions in this week’s report, which is compiled based on Tuesday’s positions.

Baker Hughes reported a net decline of 2 oil rigs last week across the entire US. Texas and Louisiana saw declines in their total rig counts (oil and gas), while North Dakota and Colorado had small increases.

There is another tropical depression in the Atlantic which is predicted to become our next tropical storm, but fortunately looks like it will stay out of sea and not threaten land.