Crude Oil Futures Are Leading The Energy Complex Higher This Morning With WTI Jumping 2% And Exchanging Hands Above The $92

Crude oil futures are leading the energy complex higher this morning with WTI jumping 2% and exchanging hands above the $92 so far today. Gasoline is rallying in sympathy, trading nearly 5 cents higher than yesterday’s settlement (+1.8%), while ULSD plays the laggard, staying just on the green side of breakeven.

The rally in crude oil prices seems significant when equities saw their worst day in months yesterday and the US Dollar has pushed to highs not seen since last year. Diverging market moves between energy futures and equities is typically viewed as a sign of a healthy energy market since it’s assumed that price direction is following fundamental cues rather than those of a more technical or algorithmic nature. It will be interesting to see how the money managers’ positions change on the CFTC’s Commitment of Traders report.  

Invest AL91 continues to show signs of organization as it drifts west in the Atlantic. The National Oceanic and Atmospheric Administration gives it a 90% chance cyclonic development over the next 2 days, but most projections keep it out to sea with some showing it graze the Lesser Antilles. Tropical Storm Philippe is still hanging around and will likely make landfall in Puerto Rico as a Tropical Depression.

The American Petroleum Institute published their national inventory estimates yesterday afternoon, showing a ~1.6 million barrel build in US crude oil inventories, while gasoline and diesel stocks dropped 70,000 barrels and 1.7 million barrels, respectively. The Department of Energy’s official report is due out at its regular time this morning (9:30 CDT).

West Coast gasoline basis spiked yesterday as that side of the country grapples with refinery downtime and tight low RVP inventories heading into October. The P66 Wilmington and the PBF Torrance refineries are down for maintenance, on the heels of an unplanned flaring event at Chevron Los Angeles last Friday. LA CARBOB traded $1.87 over its NYMEX counterpart, and, judging by what happened last year, it may have higher to go.

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