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MarketWatch

Refined Products
10.24.2014

Recap: Oil markets performed another pop and drop Thursday, this time popping back up after Wednesday's drop. As oil markets continue to weigh global over-supply issues, news that Saudi Arabia had cut oil supplies in September spurred speculation that the Saudis were actually cutting production. It seems production cuts were not the reason for a decrease in their crude oil supplied to the market. "Saudi Arabia supplied the international and domestic market with 9.36 million barrels a day of crude oil in September, down from 9.688 million barrels a day in August, an industry official familiar with the matter said Thursday. However, the country's overall production grew from 9.597 million barrels a day in August to 9.7 million barrels last month. The country can use storage to produce more oil than it supplies to the market." (Dow Jones 10-23-14). ICE Brent Crude led the pack, increasing $2.12 to $86.83, while NYMEX (WTI) Crude increased $1.57 to settle at $82.09. The Brent-WTI spread widened to $4.74. NYMEX RBOB (Gasoline) was the product leader increasing 5.13 cents on the day to settle at $2.2069. NYMEX ULSD (HO) increased 2.56 cents settling just under $2.50 at $2.4990.  

Currently, oil markets are down across the board on the following likely topics that may reduce petroleum demand: the European Union agreeing yesterday to cut carbon emissions by 40% by the year 2030, a confirmed case of Ebola in NYC, and an alleged Islamic extremist attacking a group of NYC police officers with a hatchet, critically injuring one, and injuring a second. NYMEX ULSD (HO) is down 3.51 cents to $2.4639, NYMEX RBOB is down 2.04 cents to $2.1853, NYMEX Crude down 91 cents to $81.18, and ICE Brent down 85 cents to under $86 at $85.98. Oil markets along with other markets will likely be impacted by some Ebola and ISIS fear factors ahead of the weekend.

With news of Ebola and ISIS, have we forgotten Russia? Sweden has not.  Last weekend, Sweden deployed emergency naval operations in the Baltic Sea around the Stockholm archipelago and announced a no-fly zone around the area on Monday, looking for a suspected Russian submarine in their waters. "Moscow has denied it has any submarines in mechanical trouble in Sweden's waters, but nervous governments fear that the Baltic Sea could become the next flashpoint with Russia after Ukraine. " (Reuters 10-20-14) By Tuesday, "... the Swedish Defense Ministry said that a military search team of 200 personnel aboard ships, helicopters and minesweepers, was continuing to scour the Baltic Sea not far from Stockholm in search of an unidentified foreign vessel, in what Ingela Nilsson, a Swedish Defense Ministry spokeswoman, called the biggest such mobilization since the end of the Cold War." Additionally, "The North Atlantic Treaty Organization said in a statement Tuesday that it had scrambled fighter jets for the second day in a row to intercept Russian military aircraft over the Baltic Sea." (NY Times 10-22-14)  Other nations sharing the Baltic Sea such as Estonia and Lithuania were also increasing surveillance as Lithuanian officials thought it was not such a "coincidence" that the sighting of a Russian ship with underwater recovery equipment was spotted around the time that a "... massive floating liquefied natural gas (LNG) terminal  [was] due to sail to Lithuania from Denmark this week. Named Independence, the terminal is intended to reduce the Baltic region's dependence on Russian energy." (Reuters 10-20-14) Hmmm ... Sweden's concern with Russia, along with other Baltic Seas neighbors like Finland, is that their defense cutbacks have limited their defense capabilities against a more aggressive Russia. In fact, reports are surfacing that neutral Sweden who is a not a member of NATO, is now considering NATO membership.Click here to view today's Refined Products MarketWatch.
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Natural Gas
10.24.2014

On Thursday, October 23rd the front month NYMEX Natural Gas Futures Contracts opened at $3.618, more than four cents below Wednesday’s closing price.  November was trading on either side of the $3.62 mark after the open, as traders awaited the EIA storage report for more clues about the market's direction.  As soon as the bullish report hit the wire at 10:30AM, November jumped to $3.675.  And by 10:50 AM it had reached the intraday high of $3.683.  The next hour saw prices retreat to $3.644 before bouncing back to the $3.68 level around noon.  As traders shifted their attention to the latest weather forecasts calling for warmer-than-normal November, selling intensified during the early afternoon session.  November slipped to the intraday low of $3.590 around 2:00 PM.  The final 30 minutes of trading saw some buyers enter the market, pushing November up to close at $3.622 on Thursday.  

The EIA Natural Gas Storage Report published on Thursday showed a 94 BCF injection to storage for the week ended October 17th - lower than the market consensus estimate of 98 BCF.  Total working gas in storage was reported as 3,393 BCF; 9.0% below this time last year and 9.1% below the five-year average.

This morning in Globex, WTI Crude was down $1.07; Natural Gas was down four cents; Heating Oil was down three cents; and, Gasoline was down two cents.

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

 

 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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