Market Scenarios IKE a refinery event. USGC Crude production resumes well before refineries return. Domestic grades significantly weaken. Product imports surge. Natural Gas BEARISH, lost refinery and utility demand while production quickly resumes. Padd 1 becomes the import magnet even though Padd 3 diffs thru the roof due to logistics/distance (Equity world: FTO/HOC/TSO benefit, SUN initially, however, import surge quickly hits NYH, careful SUN longs, hedge with DUG) Mexico replaces 200mb/d or so of USGC gasoline imports fm Deer Park/Norco, initially turns to Padd 5 then Asia for replacement bbls (+TSO). Maya weakens. Opportunity for coker refiners to sell the light heavy diff. WTI time spreads may temp strengthen if flat price rises, however, Brent is the fundamental beneficiary as non US refiners up runs, benefitting Brent over WTI (Buy Brent/Sell WTI into the pop) Canadian grades weaken as Padd 3 crudes forced up Capline/Seaway etc into Padd 2. (FTO Wins here) Overall, macro fundamentals stay in place, slowing demand etc.
Oil, Gas, and Nat Gas are down big this morning on the lack of damage from Ike. Major damage was baked into the cake and that did not happen. The trend is lower here and I would not be surprised if we go as low as 60 on oil and 4 on nat gas. Anytime there is a bubble the correction is always as bad on the way down. Good luck duggers 50 is right around the corner.