Short Covering Was The Theme Of The Week For Money Managers Trading Nymex Futures

Energy prices are starting the week on a soft note, with ULSD once again trying to lead the complex lower as the market largely shrugged off news that OPEC & Russia were extending their “voluntary” output cuts another 3 months to the end of June, which had been largely telegraphed in the past couple of weeks.

Short covering was the theme of the week for Money Managers trading Nymex futures and options last week with WTI, HO and RBOB combining to liquidate more than 30,000 contracts. ICE contracts did not follow that pattern however with both Brent and Gasoil seeing new shorts added, and total net length held by money managers reduced on the week. Open interest in refined products also saw a notable pullback last week, after reaching their highest levels since the Ukraine war broke out the week prior.

Baker Hughes reported an increase of 3 oil rigs drilling in the US last week, which isn’t news on its own, but combined with the 6 rigs added last week marks the largest 2 week increase in the active rig count since November 2022. Natural gas rigs declined by 1 for a 2nd straight week, and some analysts feel that WTI’s profitability may continue to put downward pressure on Natural Gas prices and drilling activity since the extra gas produced with oil could create containment issues until more export infrastructure is completed.

If you want to know how close Borger TX was to being overrun by the wildfires raging across the panhandle, see this article on the prescribed burn that probably saved the town, and perhaps its refinery. The P66 refinery did report an emissions event Saturday, but it appears to be unrelated to the fires, and otherwise there do not appear to be any impacts on the plant’s operations.

Marathon’s Wilmington refinery in California reported unplanned flaring Sunday, although as is the case with most AQMD filings, details on the cause or duration are scarce.

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