Futures Mixed, Market Mulls Global Fundamentals

The lack of new headlines after Monday’s relatively quiet trading session has the market ruminating on whether OPEC+’s production cuts or China’s dim economic outlook should be in the proverbial driver’s seat in the short or long term. This morning sees gasoline futures edging higher by just under a penny while heating and crude oil both drift lower, but only just.

The 80-year record breaking storm that made landfall(?) in southern California ended up being much ado about nothing. Although it sounds fun to say the area received its annual amount of rainfall in just a day, it turns out that the annual amount of rainfall for the desert isn’t that much. Aside from temporarily flooded, muddy roads and a novel picture of a baseball stadium, Hilary came and went without any major disruptions, especially to energy infrastructure.

The EIA published an interesting note this morning highlighting that while the total commercial energy consumption dropped by 3% in 2021 (yes, they are a couple years behind), it increased in several states. Most notably, Alaska saw an 11% increase due to a 22% increase in the number of Heating Degree Days brought on by lower temperatures. When the data for this year comes out in 2025, it will be interesting to see if there’s a large shift from energy consumption due to colder temperatures to energy spent on keeping us from baking.

Tropical Storm Harold is expected to dump rainfall on south Texas through tomorrow as it makes landfall near South Padre later today. As of now it looks like the handful of refineries in Corpus Christi are the only bits of infrastructure in Harold’s path, but unless the pallid storm stalls out over the area, it’s expected to pass without any substantial impact.

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