Searching for a Direction

Author: Pam Corn   Date:

 The market took a dive yesterday afternoon, but rebounded early this morning and is still trying to regain some ground. Yesterday the market closed down, front month HO down $0.0301 to $1.3648/gal, front month RBOB down $0.0135 to $1.4105/gal, and WTI Crude down $0.70 to $42.53/bbl.

Falling prices have many people worried about the oversupply of product and lack of demand. Crude prices have dropped about 20 percent since late February of this year and have hit a seven-month low.  According to Bank of America Chief Global FICC Technical Strategist Paul Ciana, “Oil is in a downtrend and risks trending into the $30’s.” This will be a problem to most, but some shale producers in the U.S. will still be able to produce profitability. Nigeria is still producing record output and is forecasted to exceed 2 million bpd in August, virtually cancelling out OPEC’s agreement to reduce output by 1.8 million bpd.  Refinery runs are operating at 94%. 

Two other important news items to keep an eye on are:

  • ExxonMobil’s Joliet refinery outage due to a leak in a production unit. This outage at the 260,000b/d refinery could last up to 10 more days.
  • Tropical Storm Cindy has officially come ashore today in southwestern Louisiana. According to the U.S. National Hurricane Center the storm’s maximum winds have decreased to 40mph, but Cindy has produced anywhere from 2-10 inches in certain areas on the Gulf Coast.

Currently, as of 11 a.m. ET the market is trading up, July HO up $0.0191 at $1.3839/gal and July RBOB up $0.0272 to $1.4377/gal.

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As Director of Marketing for Guttman Holdings, I lead our advertising, digital marketing, branding, and public relations strategies, and share my expertise to communicate key messaging to all our stakeholders. With my diversified leadership background, I also drive innovation and cutting-edge business practice and results, to generate interest in Guttman Energy, Guttman Renewables, and Source One service offerings.

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