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MarketWatch

Refined Products
9.22.2014

Weekly Recap:  Oil markets rebounded Friday after Thursday's slide, with the exception of NYMEX (WTI) Crude, which settled down 66 cents to $92.41.  Today, the October WTI futures contract expires and contributed to its liquidation on Friday; however, the incoming November contract settled at $91.65.  In a week's time, NYMEX Crude has increased 14 cents.  ICE Brent Crude (November contract) increased 69 cents on Friday to settle at $98.39, while the overall weekly increase was 43 cents. The November Brent-WTI spread continued to narrow Friday to $5.98, down 9% from $6.59 a week earlier. As this spread continues to narrow, the incentive for U.S. refiners to export refined products declines.  Hopefully this trend continues as the Northeast enters fall, colder temperatures, and increased heating demand on the heels of refinery fall maintenance, which will strain already low distillate inventories. On the products side, NYMEX RBOB (Gasoline) shot higher Friday by 5.04 cents to settle at $2.6114, helped by the unwinding of the October RBOB-WTI crack spread ahead of today's WTI expiration. NYMEX RBOB is 9.26 cents higher than the previous week.  NYMEX ULSD (HO) settled up 43 points to $2.7166 Friday, although it was 2.39 cents down from the previous week. 

Currently, NYMEX Crude is up 10 cents to $92.51, but the rest of the oil complex is down. NYMEX ULSD (HO) is down 1.20 cents to $2.7051, NYMEX RBOB is down 3.02 cents to $2.5812, and ICE Brent Crude is down 69 cents to  $97.71.

PADD 1 (East Coast) Distillate Stocks Recap:  PADD 1 (East Coast) distillate stocks  increased again this week, .46  MMbs to 41.80 Million barrels (MMbs) as East Coast refineries improved their % of operable refinery capacity from 81% to 91.2%.  But PADD 1 distillate stocks are still 2.6% lower than last year, and 20% below the 5-year average (see EIA's PADD 1 Distillate Fuel Oil Stocks chart below). Although this positive trend is welcomed, and PADD 1A (New England) stocks are now 3.6% higher than last year, they are still 41% below the 5-year average. PADD 1B distillate stocks deficits did narrow, but are still down 9% as compared to last year at this time, and are down 23% versus the 5-year average. Oil markets will be watching closely for any improvements to the Northeast's distillate stock inventories with the weekly DOE Report release on Wednesday as St. John, New Brunswick  refiner, Irving Oil, commenced a prolonged refinery maintenance period of 8 weeks last Monday.

Speculator "Spec" Watch:  Net Speculative length increased for NYMEX (WTI) Crude; however, NYMEX RBOB (Gasoline) decreased to another four-year low. NYMEX ULSD (HO) expanded a net-short position for another record high.  According to the CFTC's Commitments of Traders Report released on Friday for reporting through Tuesday, September 16th, the Money Manager (Speculative) category for NYMEX (WTI) Crude, net speculative length (combined futures and options contracts) increased 9% from the previous week of 186,612 futures and options to 203,648.  Product speculators are still bearish. NYMEX RBOB net speculative length decreased a whopping 52% from 17,125 futures and options contracts to 8,277. NYMEX ULSD (HO) is still net short and moved higher by 6% to  -21,390 more futures and options contracts than the previous week at -20,146 contracts. (Negative representing net-short position.)

Click to see today's market watch report for the oil markets in a downloadable format.
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Natural Gas
9.22.2014

On Friday September 19th, the front month NYMEX Natural Gas Futures Contracts opened at $3.877, more than three cents below Thursday’s closing price.  After the unfavorable EIA report sent prices tumbling on Thursday, the bearish sentiment persisted on Friday, as concerns about the swollen inventory weighed on the market.  October traded down throughout the early morning hours, dipping to the intraday low of $3.834 around 10:30AM.  Following a brief recovery to the $3.87 level, October slipped and traded sideways along the $3.85 level for the majority of the afternoon session.  The last 10 minutes of the trading session saw losses deepen as traders tried to close out their positions before the weekend.  October closed at $3.837 on Friday.

This morning in Globex, WTI Crude was up 10 cents; Natural Gas was up almost two cents; and, both Heating Oil and Gasoline were down.  

New England cash prices were up slightly, while New York cash prices were down.

 

Natural Gas Glossary

For access to Sprague’s full Natural Gas Market Watch Report including commentary not posted here, please send your request to natgas@spragueenergy.com or call 1-855-466-2842.

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