Refined Products Back Off Recent Rally

On February 11, 2014 by TradingDesk

Refined products backed off their recent rally Monday, as news of pending imports into the New York harbor crushed prompt diesel prices, despite another round of winter weather hitting the eastern seaboard. RBOB has already erased yesterday’s losses overnight however, providing more evidence that we may be witnessing the early stages of a spring rally.

WTI settled above $100 for the first time in 2014, although some caution is warranted as several “overbought” signals are flashing on the charts, and the last time WTI broke $100, it dropped by $10/barrel over the next 8 trading sessions. The spread between Brent and WTI has narrowed considerably over the past few weeks, which could cause some change in the US refining picture, as we approach what is scheduled to be a busy maintenance period in March.

Yesterday’s news that the Enterprise TEPPCO pipeline was forced by the FERC to prioritize shipments of propane to try and salvage a disastrous supply situation in the north east had little impact on refined product prices in the region. For now, markets are still pricing outages as a short term event that should heal by the end of the month.

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