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MarketWatch

Refined Products
4.16.2015

Recap - Bulls Stampede:  Oil markets screamed higher Wednesday after the release of the EIA's weekly DOE Inventory Report at 10:30AM yesterday, and didn't look back. A smaller-than-expected build in crude oil stocks of 1.3 Million barrels (MMbs) became a signal for bulls to run as NYMEX (WTI) Crude broke through 3 technical resistance points, hitting a high of $56.69 and settling close to it at $56.39, up $3.10 or 5.82% on the day on strong volume of 431,026 futures contracts with open interest of 165,956. In just a week's time, WTI crude is up 12% and yesterday's NYMEX Crude settlement was WTI's highest level so far in 2015. ICE Brent moved higher as the May futures contracts expired yesterday, up $1.89 to $60.32 while the incoming June Brent futures contract settled up $3.51 to $63.32. On the products side,  bulls pushed prices higher as three technical resistance points were shattered.  NYMEX RBOB (Gasoline) was the larger product gainer yesterday, increasing 10 cents or 5.4% to $1.9360 following crude higher as DOE inventory data revealed a bullish, larger-than-expected decline of 2.1 MMbs, on estimates of a 1 MMb draw. In a week's time, NYMEX RBOB has gained 20 cents. NYMEX ULSD gained 8.71 cents or 4.8% yesterday, and closed in on the $1.90 handle with an intraday high of $1.8921, but settled at $1.8888. Although DOE inventory data revealed an unexpected and bearish 2 MMb distillate stock increase on estimates for a .5 MMb decline, the stampede from the rest of the petroleum bulls pushed ULSD higher as well. In a week's time, ULSD has gained 19 cents.  

Currently, the petroleum complex is down across the board as oil market participants are now booking profits from yesterday's extraordinary gains.  NYMEX Crude is down $1.12 to $55.27, ICE Brent is down $1.06 to $62.26, NYMEX ULSD is down 2.2 cents to $1.8668, and NYMEX RBOB is down 3.02 cents to $1.9058. Oil market bears will be intently looking for an opportunity to break the bull run in NYMEX Crude. But for now, the complex seems to have moved to a higher range in the short-term, and the one constant continues to be volatility.

Recap PADD 1 (East Coast): DOE Inventories:   The DOE Inventory Report for the week ended April 10, 2015, showed another strong national refinery operable capacity percentage of 92.3%, up 2.2 percentage points on strong refiner margins, as PADD 1 (East Coast) refinery runs rebounded 1.1 percentage points to 86.9% (as compared to 79.2% last year at this time). PADD 1 distillate stocks increased .92 MMbs; however, as compared to the rest of the PADDs in the country, PADD 1 is the only location that is currently below its 5-year range (see chart below). Within PADD 1, PADD 1B (Central) and PADD 1C (Lower) locations gained from the previous report up 1.525 MMbs and .234 MMbs, respectively. PADD 1A (New England) was a big decliner, down .84 MMbs, likely due to colder-than-normal temperatures. PADD 1's overall distillate stocks are now 6.2% lower than last year, and  21.4% below the 5-year average. PADD 1A is 5.5% higher than last year, but  is 17.4% below the 5-year average, PADD 1B is 11% lower than last year but 29% below the 5-year average, and PADD 1C is 3.4% below last year, and 9.7% below the 5-year average. Total gasoline stocks are 8.4% higher than last year and PADD 1 gasoline stocks are 16.2% higher than last year. It looks like the country is well-supplied for initial indications that gasoline demand and travel is trending up. With spring in the air, drivers are back on the roads. Happy, safe driving!
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Natural Gas
5.29.2015

On Thursday, May 28th, the July NYMEX Natural Gas Futures Contracts began trading as the prompt month.  Upon entering the market at $2.811, slightly below June’s settlement price of $2.815, July declined, falling to $2.776 by 9:20AM. Trading evenly near the $2.79 mark ahead of the weekly storage report’s publication, the larger-than-estimated injection sent prices into a free fall, bottoming out at $2.708 at 10:30AM. With prices unable to recover, the contract traded steadily lower from the $2.73 level at 11:20AM to the intraday low of $2.702 just minutes before closing, as July closed lower on Thursday at $2.706.

The EIA Natural Gas Storage Report published on Thursday showed a 112 BCF injection to storage for the week ended May 22nd – higher than the market estimate of 105 BCF.  Total working gas in storage was reported as 2,101 BCF; 54.1% above this time last year and 0.8% below the five-year average.

This morning in Globex, WTI Crude was up 73 cents; Natural Gas was flat; and both Heating Oil and Gasoline were slightly higher.

New York and New England cash prices were lower across the board.

 

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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