All Quiet On The Atlantic Front

Energy prices are drifting lower this morning after yesterday’s rally left prompt month refined product futures with ~1.5% gains on the day. The complex was led by the crude oil grades with both WTI and Brent futures adding between 2-3%. The European oil benchmark touched above $75 per barrel this morning for the first time since 2018, prompting discussions at OPEC+ surrounding supply increases.

All quiet on the Atlantic front: tropical storm Claudette has rolled off the radar and the coast seems clear for the foreseeable future with only a small disturbance lurking to the Southeast of the Lesser Antilles. It’s given a low 30% chance of cyclonic development within the next 5 days, but eyes will continue to be trained eastward as 2021 is projected to be another busy hurricane season.

The RIN credits representing ethanol and biodiesel bumped another 4-5 cents yesterday, extending their bounce after a two-week long collapse. Underlying feedstock prices jumped, most notably soybean oil futures settling with nearly 4% gains.

Money managers have added to their net long positions in both WTI and Brent futures last week, making it a month-long streak of bullish bets by the “smart” money. Investing confidence in American crude oil hasn’t looked this strong in about three years with speculative length pushing to levels not seen since the summer of 2018. It’s the opposite story with refined product positions: the increase in short positions for diesel and the trimming of length in gasoline led to a drop in managed net position for both products.

Click here to download a PDF of today's TACenergy Market Talk.