Back And Forth Trading Continues For Energy Contracts

Back and forth trading continues for energy contracts as traders wind down positions ahead of the holidays and liquidity quickly runs dry. Thursday’s session featured a 4-cent bounce from ULSD off of its morning lows, and already overnight we saw 3.5 cent gains erased, only to bounce once again just before 8am. RBOB futures dropped 4-cents Thursday but are up almost 4-cents this morning. 

Oil futures came under a bit of selling pressure Thursday after Angola announced it was leaving OPEC in a dispute over the cartel’s quotas. While the west African nation makes up just 3.5% of OPEC’s production, it’s yet another sign that the group has problems ahead as it tries to limit output. Don’t worry about the cartel disbanding anytime soon however, as Brazil is set to join OPEC next month. 

The Red Sea has been relatively quiet since the US announced its coalition to combat attacks on ships in the region, but shipping companies appear to be content to take the long way around Africa for now. 

The most notable cash market action Thursday came in San Francisco as spot gasoline continued to see a strong rally following a weekend upset at the PBF Martinez refinery that led to citations and ongoing protests outside the facility.

While refined products appear to be stuck in neutral short term, ethanol prices continue to slide, approaching 3-year lows this week as a bumper corn crop and slight hope for new mandates in the US puts downward pressure on the 198-proof alcohol turned fuel. 

Futures will be completely closed to trading the next two Mondays as Christmas and New Years are two of only 3 holidays each year when the Nymex completely closes its electronic trading platform. That means prices set tonight will carry through Tuesday without concern with what could happen in electronic trading.

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