Markets In The Green To Start St. Patrick's Day Trading
Markets are in the green to start St. Patrick’s day trading, with U.S. equities trying to recover from their worst day in over 30 years, and gasoline prices trying to claw back from their lowest levels in more than 15 years.
Uncertainty continues to rule the headlines as the world struggles with what comes next in the Covid wars, making volatility the only certain outcome near term. It was more of the same overnight as equity futures hit limit up only to see those gains wiped out before heading higher a second time. For energy, we saw RBOB rally nine cents, only to fall back to more modest gains this morning.
Refined products have outpaced crude in the selling over the past week, putting refinery margins at multi-year lows, making it more likely that we’ll see production cutbacks near term that will help balance the anticipated drop off in demand as much of the country self- quarantines.
Ethanol & RIN values have been falling in sympathy with gasoline prices as the anticipation for a drop in driving demand – and perhaps even some leniency from the government on struggling refiners – sends buyers to the sidelines.
Speaking of which, with so much uncertainty and record-setting market reactions, we can expect government intervention in fuel markets – perhaps in the form of RVP waivers this spring – as the industry may otherwise struggle to convert from winter to summer grades without the typical seasonal increase in demand.