The energy markets are continuing their volatile trends as geopolitical risks fade and weakening demand factors start to take focus. We’ve been describing for several weeks how crude storage would rise above seasonal norms based on how much crude was in transit while demand remained soft. This would push builds above seasonal norms and keep pressure on crack spreads. Supply still remains off the market so we shouldn’t see a continued push past last year’s number on the crude side, but the products market is showing a lot of pressure in the near term. As refiners come out of turnaround, there will be more problems for products- especially as economic pressure picks up. Based on the data, the Fed won’t be able to cut as yields continue to trend higher. The BoJ has a meeting Thursday that could easily adjust the way the market views USD/Yen and the underlying carry trade.
This content is locked
Login To Unlock The Content!