Morning Energy Comments
Energy Outlook:
Energy futures are trading mixed ahead of the opening with RBOB
trying to lead the way higher while WTI and heat hover around
unchanged. The market was pleased with the release of Spain’s 2013
budget yesterday as it went above and beyond the EU’s requirements to
qualify for bailout funds. Israeli PM Netanyahu addressed the UN
yesterday to express concerns of Iran’s nuclear program and asking for
western powers to set guidelines for Tehran to abide by or else get
attacked, which only adds to the geopolitical tensions. On the economic
front traders will be looking at the release of Chicago PMI and
Consumer Sentiment figures due out later today. Look for another
choppy session today with prices likely to chop in and out of the red.
October refined product futures come off the board today which should
only help to add to the volatility.
Basis Commentary:
The volatility seen from the October RBOB contract has caused cash
markets to go crazy. First off, in order to avoid rolling futures hedges to
the November RBOB contract (which is some 25 cents lower compared
to the Oct), Group gasoline sellers have literally dumped product on the
market – taking N grade gasoline down some 32 cents this week alone.
Yesterday saw a 14 cent downswing. NY Harbor RBOB was actually
unchanged in the region as the drastic flat-price appreciation yesterday
seemed good enough for cash sellers. LA carb gasoline was on the
other side of the pendulum as ongoing refinery problems around
California continue to tighten up supplies and induce panic buying.
