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MarketWatch

Refined Products
10.31.2014

Recap: Oil markets started lower Thursday and settled lower across the board by the end of trading as a stronger U.S. dollar and equity market pushed down commodities, including oil.  As November NYMEX ULSD (HO) and NYMEX RBOB (Gasoline) futures are set to expire at the end of today, the additional choppiness and volatility feels like a bag of tricks and treats. NYMEX ULSD and RBOB continued to move lower after the settle to $2.5005 and $2.1958, respectively, appearing like a last push to break the second technical support level for both. November NYMEX ULSD finished down 2.22 cents to $2.5128, while the incoming December contract settled down 1.85 cents to $2.5050. November NYMEX RBOB settled down 2.49 cents to $2.1958, while the incoming December contract settled down 2.06 cents to $2.1610. The crudes moved lower close to the gains made the previous day: NYMEX (WTI) Crude lost $1.08 to settle at $81.12, while ICE Brent Crude lost 88 cents to settle at $86.24. The Brent-WTI spread settled at $5.12.  Helping oil markets to move lower on Thursday, a "Reuters monthly poll of 31 economists and analysts said Brent was likely to stay below $100 a barrel for the next two years, averaging $93.70 in 2015 and $96.00 in 2016. That is $9.60 a barrel below the average forecast in the last Reuters poll in September and the biggest monthly cut in forecasts for year-ahead oil prices since November 2008, when the world was in the depths of the global financial crisis. Twenty four of the 26 analysts who contributed to data for both the September and October Reuters polls slashed their forecasts, some substantially." (Reuters 10-30-14)  

Currently, oil markets are down across the board: NYMEX ULSD down 2.41 cents to $2.4887, NYMEX RBOB down 2.28 cents to $2.1730, NYMEX Crude down 91 cents to $80.21, and ICE Brent down 89 cents to $85.35.

Long Range Winter Outlook for Winter 2014-2015 (see map below): Meteorologist John Bagioni of Fax-Alert Weather Service issued a revised outlook on Wednesday that remains consistent with his outlook issued at the end of August: for the Northeast, the winter months of December, January and February will be colder than  normal, with the exception of northern New England being closer to normal. While we enter November, he  believes the outlook for this month does not call for prolonged stretches of cold, and "through about November 20th, there is more support for a mild bias to the November forecast than a cold bias." (Fax-Alert Weather Service 10-29-14) 

Weekend Planning - Heating Degree Day (HDD) Forecast: With November starting with a cold spurt, it is time to start watching those heating degree days for delivery planning. Fax-Alert Weather Service has forecasted heating degree day (HDD) % of normal in its Ten Day Temperature Guidance report for the period  October 29th-November 7th for the following Northeast locations. (HDD percentages below 100% indicate percentage lower than normal while percentages above 100% indicate percentage increase of HDDs above colder than normal temperatures.) 

New York:  NYC 89%, Binghamton 97%, Albany 95%, Newburgh 87%

New Jersey:  Newark 88%, Trenton 92%

Pennsylvania:  Philly  96%

Massachusetts:  Boston 89%, Worcester 92%, Chicopee 105%, Hyannis 89%

Connecticut: Hartford 91%, Bridgeport 91%, New Haven 94%

NH: Manchester 88%, Portsmouth 91%, Lebanon 94%, Concord, 93%

Maine: Portland 91%, Augusta 90%, Bangor 92%

Vermont: Burlington 95%, Rutland 97%

Rhode Island:  Providence 90%

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Natural Gas
10.31.2014

On Thursday, October 30th December opened at $3.821, more than three cents above Wednesday’s closing price.  It then drifted along the $3.81 level while the market awaited the release of the weekly storage report.  As soon as the lower-than-estimate report was published, December jumped up to $3.836.  However, prices quickly pulled back and zigzagged along the $3.80 mark for the remainder of the morning trading session.  The afternoon session was quiet with December trading within a narrow band between $3.80 and $3.83 through 2:00PM.  The last 30 minutes of trading saw some buyers enter the market, taking December to the intraday high of $3.838 before it closed at $3.827 on Thursday. 

The EIA Natural Gas Storage Report published on Thursday showed an 87 BCF injection to storage for the week ended October 24th – slightly below the market estimate of 88 BCF.  Total working gas in storage was reported as 3,480 BCF; 7.8% below this time last year and 8.2% below the five-year average.

This morning in Globex, WTI Crude was down 65 cents; Natural Gas was up 10 cents; and, both Heating Oil and Gasoline were down more than two cents.

Both New England and 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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