"It's a new world since the last storm," as Gulf hurricane bearish for oil prices
Seeking Alpha
Published Aug 24, 2017 06:30PM ET
"It's a new world since the last storm," as Gulf hurricane bearish for oil prices
- U.S. crude oil prices tumbled 2% today to $47.43/bbl, as pressure from the risk of weaker energy demand in the wake of Hurricane Harvey outweighed the typical price gain associated with likely production disruptions in the region.
- "It’s a new world since the last storm" a decade ago, says Bob Yawger, head of the futures division at Mizuho Securities; unlike Hurricane Ike in 2008, the worry today is about the facilities that refine the oil instead of pump it, since discoveries in U.S. shale have led to more production from locations further from the coast.
- According to Commerzbank (DE:CBKG), the high level of refiner activity has been the sole contributor to the drop in crude storage, as U.S. production and imports have climbed; if refiners stop processing crude, it could lead to another build up in stockpiles, a bearish factor for the oil market.
- Harvey’s threat to refinery activity pumped up gasoline futures prices, with September gasoline rising 2.8% to $1.664/gal.
- Shares of refining companies enjoyed broad gains in today's trade: VLO +2.7%, MPC +1.8%, PSX +1.8%, HFC +2.8%.
- ETFs: USO, UNG, OIL, UGAZ, UWT, UCO, DGAZ, DWT, SCO, BNO, BOIL, DBO, GAZ, UGA, DTO, USL, KOLD, UNL, DNO, OLO, SZO, DCNG, OLEM, OILK, WTIU, OILX, WTID, USOI, GAZB
- Now read: Phillips 66 Expertly Navigates Tough Market
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