Energy Markets Have a Quiet Start, Ukraine Strikes More Russian Refineries

It’s a quiet start to Wednesday’s trading with RBOB and WTI holding small gains while ULSD hovers near breakeven after a big Tuesday sell-off. RBOB prices are holding about 3 cents above the 4 year low set on Friday, while ULSD prices touched a fresh 4 month low overnight.

Yesterday the IEA’s monthly report forecast a growing glut of supply as increased output from OPEC and friends hits at a time when “a harsher macro climate and transport electrification make for a sharp deceleration in oil consumption growth.”

The weekly inventory reports are delayed a day due to Monday’s quasi-holiday.

Ukraine hit 2 more Russian refineries overnight, with the 300mb/day Lukoil refinery in Volgograd and one of Rosneft’s refineries in Ufa.

Used cooking oil made a rare headline Tuesday after the U.S. president suggested the country would stop buying the biofuel feedstock from China as the trade tit for tat rolls on. In reality U.S. purchases of Chinese “UCO” (which many believe may actually include virgin palm oil) have already plummeted since they do not qualify for credit under the current Clean Fuel Production Credit (45Z) and next year any imported feedstocks are set to only receive 50% of their RIN value.

Chevron continues to work on units at its El Segundo refinery that suffered a fire almost 2 weeks ago. The facility reported more unplanned flaring Tuesday, marking the 4th such report in as many days as the facility tries to find a new operating balance.

Tropical storm Lorenzo was named yesterday, but will stay out to sea and not threaten the U.S..