Refined Products Are Ticking Quietly Lower To End The Year

Refined products are ticking quietly lower to end the year while crude oil contracts are hovering near break-even.

What volatility? Even though energy contracts tend to be 2-3 times more volatile than equity contracts on a daily basis, the percentage change in 2024 for crude and refined products is smaller than US equity indices, and in several cases even smaller than the relatively stable US dollar which had its best year since 2015. See table below.

The exception to the 2024 volatility exception comes from Natural Gas prices which have surged 52%, after reaching record lows last winter, as the supply overhang has eased and the world once again turns to US exports to supplement the upcoming loss of Russian supplies. That rally in natural gas prices continues to lend a hand to distillate values, which have seen a healthy recovery since reaching a 3 year low back in September.

If you’re not already looking at the February contracts for price direction in your local market, make sure you’re doing so today to avoid getting tripped up by the lack of liquidity on expiration day, as is detailed in the Ticker table below.

It appears the big 4 refineries in the Pt Arthur/Beaumont region escaped any damage from the tornadoes that passed through town over the weekend, with no reports of upsets as of this morning and USGC basis values not making any notable moves yesterday. Valero meanwhile is expected to need 2-3 weeks to complete repairs at its 415mb/day Pt Arthur refinery after a fire last Friday according to Energy News Today.

Want to spend time speculating what will happen in 2025? Here are a few interesting reads to help you on your way.

Why Fracking isn’t what it used to be.

The impacts of year-round E15 on refiners (and drivers).

Why the Tariff threats and other Trump T[i]rades may be easier said than done.