Energy Markets Continue Higher This Morning After 5% Rally Thursday

Energy markets continue to move higher Friday morning after a 5% rally Thursday following multiple reports suggesting that Iran is preparing for a strike against its oil refining and export facilities and the U.S. President appearing to give tacit approval to that type of strike.

Later this afternoon we’ll see the CFTC’s latest Commitments of Traders report. Since that data is compiled as of Tuesday, we won’t get to know how much short covering was done by money managers who had record levels of money bet on lower diesel and crude oil prices until next week, but it’s safe to say that was likely a major contributor to yesterday’s price spike.

The September payrolls report showed a strong month with 254,000 jobs estimated to be added during the month, while July and August estimates were both revised higher. The headline unemployment rate dipped by one-tenth to 4.1%, while the less manipulated U-6 unemployment rate dropped 2 tenths to 7.7%

U.S. supply chains outside the energy arena are breathing a sigh of relief this morning as the port strike has ended after 3 days with both sides agreeing to a 62% wage increase over 6 years.

The NHC is giving 40% odds of a storm being named in the Gulf of Mexico next week, up from 30% yesterday morning. Meanwhile, Leslie and Kirk are churning through the Atlantic, but both are going to hook north and stay far away from the U.S.

Let the litigation continue: Legal challenges to Citgo’s sale to the “winning” bidder in its auction Elliott Management are already beginning, suggesting many months if not years of additional uncertainty for that refiner’s fate. Some may remember Elliott Management as the activist investor that forced Cabela’s to sell its stores, or its more recent campaign to try and strong-arm Southwest Airlines into firing its CEO and overhauling its board.

Marathon reported another unplanned upset at its LA-area refining complex Thursday, this one at the Wilmington facility, while its adjoining Carson plant is still undergoing repairs to an FCC unit knocked offline earlier in the week. So far basis values in the area are holding at relatively benign levels compared to the huge spikes we’ve been accustomed to as the summer RVP season winds down.