Energy Price Update

Tuesday, October 2, 2018

Brent crude futures are trading slightly lower on Tuesday, while WTI crude and refined products futures are trading flat to higher. The US dollar is appreciating against a basket of currencies, both unsupportive for oil prices. There was little on the news wires from which market participants could draw direction, and it is a quiet day on the economic calendar as well.

In the news, Reuters reports that the No Oil Producing and Exporting Cartels Act (NOPEC) is receiving renewed interest under the current administration. The President has publicly criticized the organization, both on Twitter and in remarks before the United Nations General Assembly. A version of the NOPEC bill passed both houses of Congress in 2007, but was set aside as then-President George W. Bush was set on a veto. According to Reuters, passage of a NOPEC bill this year looks unlikely, with little time left and Saudi Arabia said to be lobbying against it. Earlier this year, the American Petroleum Institute and the US Chamber of Commerce also expressed opposition to the proposed legislation.

In other news from Reuters, East Coast refiners are benefitting from a crude glut in Alberta, as bottlenecks have depressed Western Canadian Select heavy crude prices. Late last week, there was a record discount of $43.50/bbl below WTI futures. As pipeline capacity has been unable to pick up, rail shipments are on the rise, with most of the Western Canadian imports into PBF Energy’s 190kb/d Delaware City refinery, and with lighter crudes to the 335kb/d Philadelphia Energy Solutions facility. Rail volume from Canada to East Coast refineries averaged 35kb/d for the 12 months ending in July, more than double the 16kb/d average for the previous 12-month period.

Energy prices rallied further yesterday, with gains of over 2.0%, with some help from gains in the US stock market index following a trilateral trade agreement between the US, Canada, and Mexico. Also supportive, Reuters survey data indicate that Iranian oil production fell by 100kb/d last month (although overall OPEC output increased, largely due to a further rebound in Libyan output). Brent crude strengthened $2.25 yesterday, settling at $84.98/bbl. The Brent-WTI spread widened further, with WTI climbing $2.05 to $75.30/bbl. Gasoline futures jumped 4.18 cents higher to close at $2.1275 per gallon, while heating oil rallied 5.94 cents for a $2.4079 per gallon settlement.  Natural gas futures also strengthened yesterday, gaining 8.6 cents to settle at $3.094 per MMBTU.

The near-term temperature outlook, however, remains unsupportive. Mostly near to above-normal temperatures are expected across the country over the next five days by AccuWeather. The National Weather Service sees strong chances for below-normal temperatures on the West Coast, but by the same token sees high chances for above-normal temperatures across the East Coast, in both its 6-10 and 8-14 day outlooks.

Contact Us

Contact Us

Need more information? Send us an e-mail:
Fill out my online form.
Service Plan

CT & NY Average Oil Prices

View current CT & NY oil prices.
TV Ad

Westmore’s CT B20 BioHeat ad

View our new B20 BioHeat ad.
Contact Us

Contact Us

Need more information?