Energy Prices Bounced After Sizeable Selloff
Energy prices bounced yesterday after a sizeable selloff Tuesday led by diesel which tacked on as much as 7 cents intraday before settling with gains of ‘only’ 3.5 cents. Oil futures followed suit, adding about $1 per barrel, RBOB lagged behind and posted just over 1.5 cent gain on the day.
Premiums over the Colonial Pipeline Tariffs continued their trek higher yesterday and are now trading at levels not seen since December 2016. As of yesterday, shippers paid an additional 4 cents to move gasoline and 3 cents for diesel.
The American Petroleum Institute published their version of the weekly inventory report yesterday afternoon. They pegged crude oil inventory gains around 8.8 million barrels over the previous week. Gasoline builds of under 200 thousand barrels will likely fall by the wayside as traders focus on the 3.2 million barrel draw in diesel stocks.
With national stockpiles already seen at the bottom end of their 5-year range, further drop in ULSD levels could incite buying as the colder weather starts creeping in. Price action will likely be slow ahead of the DOE’s data release and will likely pick up after the state agency confirms or disproves the API’s estimates.