Crudes failed to make any inroads yesterday despite a promising early start with Dated Brent gaining an anemic 54 cents a barrel to $77.37 while WTI lost ground, falling 21 cents to end the session at $67.54. Refined materials didn’t fare much better with current VOC gasoline plunging over 7.6 cents a gallon with diesel registering a negligible loss in the hundredths of a cent. The downward moves appear to have been inspired by traders being less distracted by Hurricane Florence and more observant of EIA data which is likely to show a decline in seasonal demand, typical for this time of year. Concerns over the storm’s effect in terms of demand destruction may have also played a role in the dour mood.
News about the intensification of Florence to a possible category 5 and the development of another disturbance in the Gulf of Mexico which could threaten an area from northeastern Mexico, Texas and Louisiana next week may prompt traders to reverse their casual dismissal of meteorological factors today.
While no refinery is directly threatened by the impact of Hurricane Florence, concerns are being raised about flooding and mudslides which could affect the Colonial Pipeline that traverses the Carolinas and Virginia, albeit more inland. Other storms brewing in the Atlantic are sure to disrupt tanker movement of oil and fuel by sea as a first step that could find support for the energy price complex. Indeed markets this morning are to the upside with Brent up 40 cents and WTI gaining a dime. Refined products are also holding their own with over a penny a gallon improvements from yesterday.
For drivers in North and South Carolina as well as Virginia, the GasBuddy Fuel Outage Tracker has been activated letting motorists there know which stations have power and fuel. Currently, average prices for South Carolina stand at $2.58 a gallon with North Carolina at just under $2.65 and Virginia at $2.63. The Fuel Outage Tracker at this juncture shows fuel supplies are adequate at over 94%, but likely to decline as the day progresses. To learn more follow this link: https://www.gasbuddy.com/go/florence-live-updates-fuel-availability-station-outages/
According to the GasBuddy Live Ticking Average, pump prices are holding relatively steady at just over $2.84 a gallon, which is on par with prices both last week and last month, but 20 cents a gallon above prices this time last year. Diesel too remains firm at $3.18 a gallon or 46 cents higher than September 11, 2017.
Expect a turbulent day ahead on the markets with the weather taking center stage in trades.