RBOB Gasoline Futures Are Trading Below $1.96 This Morning, Since November 2021

Energy markets are attempting a bounce after reaching multi-year lows Wednesday. The big slide in prices this week has caused news outlets to do an about face in their predictions that OPEC and friends would proceed with their planned output increases in October, but that story will remain a convenient explanation for any sharp moves in prices.

ULSD futures traded down to $2.1500 yesterday, which exactly matches the low trade from May 4, 2023 that preceded a rally to $3.50 over the following 4 months. If support at $2.15 doesn’t hold this time around, it looks like the next stopping point on the charts comes in right around the $2 mark. For RBOB gasoline futures are trading below $1.96 this morning for the first time since November 2021, and longer term charts are looking even more bearish that diesel, with a slide all the way to the $1.25 range looking possible if buyers don’t step in around current values.

The API reported small decreases in refined product inventories of 300,000 barrels for gasoline, and 400,000 barrels for diesel last week, while crude oil stocks saw a large decline of 7.4 million barrels. The DOE’s weekly report will be released at 11am eastern today due to the holiday delay.

The National Hurricane Center is now tracking 5 potential storms in the Atlantic, but none of them is given more than 30% odds of developing in the next week. One of the new potential systems that shows up on the map today is made up of the heavy thunderstorms that have been dumping heavy rain on the US Gulf Coast this week. While it’s still unlikely that we’ll see major supply impacts from any of these systems, minor flooding and power outages are expected from TX to FL.

Energy News Today is reporting a pair of fires last week at Gulf Coast refineries are expected to keep units offline for a month of more. The 250mb/day Houston Refining units are reported to need at least the end of September, and with that entire facility scheduled to be shuttered at year end, it’s difficult to see why they’d rush to make repairs now, although the future plans for that facility remain unclear, with a hydrogen plant and renewable conversion both discussed as options. Valero’s 435mb/day Port Arthur refinery meanwhile was restarting a crude unit hit by a fire last week, but repairs to allow that unit to reach its full capacity of 250mb/day are expected to need up to 6 months. That facility is adjacent to Valero’s JV Diamond Green renewable diesel production facility but it does not appear that RD output is impacted by the CDU downtime.