Winter Storm Izzy Is Sweeping Up The East Coast After Battering Large Parts Of The Country Over The Weekend
WTI and RBOB prices are hovering near break-even while ULSD is holding gains of about a penny, which would mark its 11th consecutive increase if it settles in positive territory. It’s MLK Jr. day so physical fuel markets won’t be assessed, and many in the industry are taking the day off, although futures are trading.
Winter storm Izzy is sweeping up the East Coast after battering large parts of the country over the weekend. So far, supply disruptions appear limited to a few terminal power outages, while the demand impact seems much more widespread as drivers avoid the roads. If you haven’t had enough winter fun yet, don’t worry, there’s another storm expected to follow a similar path to Izzy later this week.
Money managers continue to add large bets on higher energy prices, with all contracts besides RBOB seeing healthy increases in net length added by the large speculative category of trader last week. While WTI saw heavy short covering in the latest COT report, its net length added lagged Brent, and with a slew of new competing oil contracts emerging in the US that could continue taking market share, that trend may continue.
Baker Hughes reported a net increase of 11 oil rigs drilling in the US last week, with the Eagle Ford basin accounting for the majority of that increase, adding 6 rigs to a basin with only 44 active a week ago. The EIA and IEA are both projecting that US Oil production will push to all-time highs by the end of this year, and this report suggests that drillers are well on their way despite the well-documented supply chain and financing challenges.