WTI Futures Are Leading The Way Higher This Morning, Tacking On 1.2% Gains To Start This Week’s Trading

WTI futures are leading the way higher this morning, tacking on 1.2% gains to start this week’s trading. Gasoline futures are trailing slightly, trading higher in what seems like sympathy, adding gains of just over a penny so far today. ULSD is the odd man out of the ‘big three’ energy futures contracts, trading lower by about .3%.

Recovery in Chinese oil demand seems to be taking credit for today’s gains, as cited by oil journalists and the Energy Information Administration alike. While there is still questions surrounding the stickiness of Eastern demand growth, the prospect of tightness is oil supply due to OPEC+ production cuts seems to be widely accepted and a main driver for the crude oil rally we’ve seen over the last three months.

Tropical Storm Lee made landfall west of Halifax, flooding areas of Nova Scotia and claiming a life. While the US Northeast was hit with near-hurricane strength winds and torrential rain, the largest impact to energy infrastructure is at Irving’s New Brunswick refinery, which was forced to close two of it’s catcrackers over the weekend.

Money managers continued piling into WTI contracts as prices broke $90 for the first time in a year last week. Speculators also added length in Brent crude and RBOB, but trimmed their length in ULSD and Gasoil contracts. 

Baker Hughes reported an increase of 2 oil production platforms in the US last week, while natural gas rigs jumped a sizeable 8 on the week, bringing the accuracy of the previous months-long decline into question.

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