The Latest Shift West In Helene’s Path Looks Like Good News For Tampa, And Bad News For Tallahassee

The Chinese stimulus bump only lasted a day, and energy markets are resuming their slide lower this morning. RBOB gasoline futures are once again leading the move, dipping back below the $2 mark despite some optimistic fundamental data.

The API reported inventory draws across the board last week with crude stocks down 4.3 million barrels, gasoline down 3.4 million barrels and distillates down 1.1 million barrels. Cushing inventories were also estimated lower as the industry’s old crude supply hub continues to be bypassed by new pipelines taking oil to the coast for export rather than letting it sit in Oklahoma. The DOE’s weekly report is due at its normal time this morning, with reductions in oil and refining output both likely due to the timing of the data collection and the short-lived impacts of Hurricane Francine.

The latest shift west in Helene’s path looks like good news for Tampa, and bad news for Tallahassee, although overall that should be a win for the state as the capital at least has a 40 mile land buffer to reduce the impacts of the storm surge. This path keeps the waterborne terminals in Panama City, Niceville and Freeport and the intracoastal waterway that supplies them all on the clean side of the storm, so currently it appears that despite the major status of the storm, the impact on energy infrastructure should be minimal.

Besides Helene, the NHC is tracking 2 other systems, one with 80% odds of being named in the next week, but both systems are pointing out to the open Atlantic and won’t threaten the US coast.

No peaking: OPEC published its annual World Oil Outlook (WOO) report Tuesday, which was highlighted by bullish forecasts that global energy demand would increase by 24% in the next 25 years, with India making up 30% of that growth total and non-OECD nations making up essentially all of the rest. The outlook predicts that all energy sources besides coal will see increased demand during that window, and that the world can only phase in new energy sources at scale when they are “genuinely ready, economically competitive, acceptable to consumers and with the right infrastructure in place.”

The WOO also predicts that essentially all refinery expansion in the next 2 decades will come from Asia, Africa and the Middle East, but the US and Canada continue to be the only regions with more than 75% desulphurization capacity, which is critical for both ultra-low Sulphur distillates, and the hydrotreating necessary to co-process renewable diesel and SAF at existing facilities.

That didn’t last long. Vertex Energy filed for bankruptcy Tuesday, which the company referred to as “Initiating a formal pathway aimed at achieving sustainable capital structure” which sounds like the same type of spin they put on their failed attempt to jump on the renewable diesel bandwagon.

RIN prices have rallied to a 2 month high around $.65/RIN for both D4 and D6 values this week. There hasn’t been any news to speak of driving the recent rally, so it seems like this may be one way gamblers (aka traders) are legally betting on another Democratic administration that will lead to a higher blend requirement pushed out by the EPA.