What is our trading focus?
OILUKOCT20 – Brent Crude Oil (October)
OILUSOCT20 – WTI Crude Oil (October)
GASOLINEUSSEP20 - RBOB Gasoline (September)
Crude oil and RBOB gasoline both trade close to a five-month high with the focus having moved from the pandemic impact on demand versus OPEC+ production cuts to the U.S. Gulf coast. Hurricane Laura which has been upgraded to a potential catastrophic category 4 storm, is due to slam into the Texas and Louisiana coastline within the next 24 hours. While she undoubtedly will cause a great deal of damage, energy prices have so far reacted calmly to these developments.
The Houston to Beaumont area holds a lot a refinery assets and during the past 24 hours the trajectory of the storm has moved further east which means that this, from an oil market prospective, important area will now be on the less violent left side of the hurricane.
According to reports more than 84% of oil output from the Gulf of Mexico has now been shut, while almost 3 million barrels/day of refinery capacity has been closed as well.