Mid Selloff in Energy Prices
Profit-taking from last week’s rally is taking the credit for the mild selloff we are seeing in energy prices so far this morning. Gas and diesel are both down around half a cent per gallon while crude oil benchmarks are shedding 10-20 cents per barrel.
Tropical storm Olga came and went this weekend and brought tornadoes and heavy rainfall to the Louisiana and Mississippi coast. As of now it doesn’t look like there were any interruptions to energy operations due to the storm.
Baker Hughes reported a drop in active US oil production rigs last week, dropping the total active platforms to 696, the lowest level since Spring 2017. Just looking at the crude oil output chart you wouldn’t be able to tell there’s a clear downward trend in number of production units as output has consistently climbed (albeit with a few interruptions) since mid-2016.
Money managers added net length to both their WTI and Brent crude oil positions last week after reaching hitting the lowest levels of the year the week prior. Some technical indicators are lending more towards higher prices as prompt month refined product futures head into their last week of trading. It will be interesting to see if prices will continue their trek higher, which seems likely for today’s trading as the board has flipped into positive territory at the formal market open.