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’Crude inventories still a problem
At the beginning of March there was a lot of talk in the crude market about an end to the contango coming soon, mostly due to some destocking of floating inventory. FT Alphaville was not convinced. In fact we reminded:
US energy prices fall as fuel efficiency standards revealed
A bit of profit taking, and some new and much stricter rules on fuel efficiency in the United States from President Obama’s administration, as reported by Reuters:
- RTRS-U.S. RAISES STANDARDS FOR AUTO FUEL EFFICIENCY FOR MODEL YEAR
- RTRS-FIRST EVER INCREASE INCREASE FOR PASSENGER CARS REQUIRES 30.2 MILES A GALLON – TRANSPORTATION DEPT
- RTRS-SPORT UTILITIES,
Energy fundamentals shifting
Retail gasoline prices may be going up, but overall refining margins are still in the doldrums.
And this time round it’s the weak distillate component that is really dragging down returns — quite the reverse of last year when gasoline was the predominant demand destruction casualty.
Contango smashing
The contango between the front-month April contract and the second-month May contract has been severely smashed over the last day.
Having averaged a difference of about $2 per barrel over the last couple of weeks,
A surprisingly large gasoline drawdown…
Here’s a shocker: gasoline stocks fell much more than expected last week , with a corresponding smaller than expected build up in crude stocks according to the latest EIA stock data. Nymex crude rallied strongly on the numbers on Wednesday,
Eastern tradewinds faltering fast
The troubles courting the commodities trade to the East appear to be getting worse. The cheapest barrels of gasoline in the world are now those being sold into Singapore at some $37 per barrel, $6 less than those sold to the Med.
Gasoline anyone?
The unthinkable is really happening. Latest DOE stock data shows gasoline demand is down in the US – AGAIN.
It seems you can’t even give the stuff away.
Gasoline stocks rose counter-cyclically in the last week by 1.98 MMbbls or 1.0 per cent.
The Negative Crack Spread
Ah,the crack spread..
Bread and butter to the gasoline trader, unequivocal jargon to every body else..
But there is more reason than usual to look at it. The spread, which is the difference in price between WTI Nymex front-month futures and Nymex Rbob (gasoline) futures – the so-called refining margin – has gone negative.