A Week That Set Records
The recovery rally in energy futures ran out of steam Thursday as RBOB saw an early 10 cent rally wiped out in afternoon trading, while crude and ULSD futures saw similar but less substantial pullbacks.
The lifespan of the market influence behind a presidential tweet continues to shrink after the latest bit of saber rattling between the U.S. and Iran failed to hold prices up for even a day. It’s hard to believe just over three months ago, military strikes between the two countries had many fearful of a supply shortage that would drive oil prices north of $100.
This week will go on record as the most volatile ever in 37 years of the WTI futures contract, while also marking the only time that contract traded in negative territory. The repercussions of those price swings are still being sorted out, with new reports suggesting that international retail investors playing in complex structured products may have been left holding the bag. After all the drama this week, the June WTI contract is now down just one dollar/barrel from where it settled a week ago.
While refined products are starting Friday’s action with a whimper, and are on pace to end the week with substantial losses, there are some signs of optimism in strengthening cash markets, and various indications that domestic demand may have found a floor. In other words, for many producers of petroleum products, things may not yet be getting better, but at least they’ve stopped getting worse - for now.