Energy Futures Are Trying To Find a Floor After Another Heavy Week Of Selling

Energy futures are trying to find a floor after another heavy week of selling in what will mark a 6th consecutive monthly loss for oil and diesel futures. Gasoline continues to show relative strength, as it typically does this time of year and is barely holding on near the weekly trend line that may well be the pivotal level that helps determine if we see prices rally back to $3 or drop below $2 in the next couple of months.

So far markets seem to be shrugging off news that Iran has seized another oil tanker in the Gulf of Oman, which occurred just as US senators urged the President to allow Homeland security to seize Iranian tankers that have been bypassing sanctions.

Today is the last trading day for May HO and RBOB futures, with June taking the prompt spot Monday. Most cash markets have already rolled to trade vs the June contract, but the New York Harbor and Group 3 markets will transition today. Many terminals will be shutting down for a few hours today to complete their transition to summer-grade RVP grades rather than waiting until the deadline on Sunday due to labor challenges over the weekend. 

The EPA is reportedly planning on issuing a summer-time E15 waiver later today, even though that higher blend is noted to increase pollution in warmer weather. As we saw last year, even with the temporary waiver, sales of E15 won’t dramatically increase given the logistical hurdles that are a challenge to overcome on a short-term basis across most of the country.

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