November 11, 2021 – Elaine is quoted in an article by Denton Cinquegrana of OPIS.
A wave of selling in overnight and early trading has all but disappeared.
Even though most contracts are still in negative territory, the declines are
much lighter than what was seen earlier in the trading session. While some
length gets cut in response to a possible strategic petroleum reserve release,
trade sources note that there are a few that may want to get short in front of
the winter, even though November is when the petroleum complex tends to peak
out.
At it’s low point today, December NYMEX WTI was trading at $79.78/bbl, but with
midday approaching, WTI futures are just about unchanged. January ICE Brent is
following a similar pattern, posting a strong rebound from the $81.26/bbl low
earlier in the day.
“Given to low level of inventories, and looking at the global picture it’s even
tighter, it’s very hard to be a bear,” Elaine Levin, President at PowerHouse
TL, a broker and commodity trading advisor, said, though Levin believes there
could be some market consolidation around these levels.
At 11:55 a.m. ET, front-month WTI was trading at $81.08/bbl, down 50cts with
January Brent last printing down 41cts at $82.46/bbl.
Refined products are a bit more mixed, with RBOB down slightly for December and
ULSD futures slumping a few pennies. Even though front-month ULSD is down,
prices did bounce off the lows.
RBOB has rebounded by more than 6cts from the earlier lows of $2.2595/gal. The
low trade today compares to some of the lowest levels in a little mover one
month and served as a buying opportunity. Front-month RBOB most recently traded
down 0.32cts at $2.3137/gal.
Cash markets are mostly following the Merc, but Gulf Coast gasoline has dipped
a bit and that is widening the spread between it and the New York Harbor
market. The two markets have been widening in recent trading sessions, and that
is being reflected in the Colonial Line space market where line 1 values are
approaching 3cts over tariffs.
While the crude oil and RBOB markets flatten out, ULSD is still down more than
2cts as the December contract is off about 3cts at $2.4166/gal, up more than
3cts from the lows. Diesel headwinds may be a bit different in the near-term.
Agricultural demand is starting to slow and cold weather in the Northern Tier
of the U.S. will slow construction, Levin pointed out. However, some support
from colder weather could come, but that may not be the case today as
temperatures in the New York City area in mid-November are above normal in the
mid-60s.
–Reporting by Denton Cinquegrana, dcinquegraan@
Kelly, michael.