New Wave Of Selling Has Hit The Complex
Just when it looked like the energy market had found a floor, a new wave of selling has hit the complex in the past hour, raising doubts that the low prices for the winter are in the rear-view mirror.
After large gains in Wednesday’s session that coincided with new all-time highs for several U.S. stock indices, oil prices were up more than a dollar overnight and refined products were up more than three cents, but have since given back those gains following reports that Russia has blocked OPEC’s attempt at increasing output cuts.
The price action to end the week should be pivotal in determining if the recovery rally can continue, or if fear will take control once again.
The DOE inventory was a relative non-event during the buying spree, with minimal changes in inventory and production numbers across the country. Perhaps the most notable change was that PADD 4, which is usually just a rounding error given the low population and energy inventory, saw gasoline inventories surge to a new record high.
Refiners continue with their seasonal maintenance patterns and we should continue to see reductions in output for another two to three weeks before they ramp up through the spring.
The EIA this morning published a note on U.S. petroleum flows, showing how most regions are still net importers, even while the country has transitioned to exporter status. This reports the growing dominance of the U.S. Gulf Coast in both domestic and global supplies.