Monday Kicking Off With Energy Prices Down Across The Board

Energy prices are down across the board this morning with crude oil leading the way lower, trading $1.50 under Friday’s settlement. OPEC+ decided yesterday to continue increasing their production levels next month in their continued push to regain market share. Gasoline and diesel futures are selling off in sympathy, both dropping <1% in premarket trading.

California has received gasoline imports from Saudi Arabia for the first time since 2022, in recent months. The state imports around 40% of its gasoline from a refinery in Western India, which shut down for maintenance four months ago, forcing Californians to look elsewhere for their unique blend of motor fuel. There’s been no news on the state’s efforts to find a buyer for the Benicia refinery, slated to close next year.

Baker Hughes reported a 14th consecutive decline in the number of active oil production platforms in the U.S., dropping their official count by 5 to a total of 410 plants last week. The natural gas rig count continued heading the opposite direction the past three weeks, adding another 2 rigs last week and 16 over the past three reports.

Money managers reversed course last week, adding fresh long positions for the big three energy contracts (RB, HO, CL) as reported by the Commodity Futures Trading Commission in their Commitment of Traders report. RBOB gasoline futures saw the biggest increase in length, adding over 6,000 contracts on the week.

There are three areas of interest in the Atlantic basin this week as we approach the busy months of this year’s hurricane season. Tropical storm Dexter, which formed last night, is expected to head out into the Atlantic and pose no threat to the U.S. mainland. The NHC gives a pocket of interest off of the Georgia and South Carolina coasts a 30% chance of organizing into a storm over the next week. The area to watch, which is given a coin flip odds of turning into a storm, is forming off of Africa’s west coast.