Hurricane Delta Strengthens to Category 4 Storm
October 7, 2020
The API released their inventory update yesterday afternoon and it said that crude oil stocks were up 951,000 barrels and the average estimates for today’s DOE number is a build of 294,000 barrels.
Cushing, Ok crude stocks were up 749,000 barrels.
API gasoline stocks were called down 867,000 barrels and the average estimates for todays are stocks down 471,000 barrels. Distillate stocks were down 1.0 million barrels and today’s estimates are down 995,000 barrels.
Energy markets traded higher yesterday after also having a strong rally on Monday. Prices were higher on the news that Hurricane Delta is expected to hit the US in the Gulf and many offshore platforms have been evacuated. Also supporting prices was the oil workers’ strike in Norway that has impacted production there. Prices fell later in the day as the news hit that President Trump wanted to end the negotiations for another stimulus package and wait until after the presidential election. Later last night the President sent out a tweet that he was open to stand alone stimulus measures. At this point it is not clear how that might look but the market has shown some optimism as a result.
Hurricane Delta has strengthened to a category 4 storm and current estimates of 29.2% of US offshore oil production and 8.6% of natural gas production have been shut down.
EIA reported in their monthly short term energy outlook (STEO) that they are forecasting lower US oil production for 2020 but much lower consumption for 2020.
The track of Hurricane Delta will be a critical factor for prices in the next couple days. Where it makes landfall and the potential damage to energy infrastructure will be key.
Average estimates for today’s propane inventory update are for stocks to be up 821,000 barrels.