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Outlook: The crude markets have fallen lower this morning after surging higher during the overnight session due to Hurricane Ida. The hurricane was seen weakening shortly after making landfall and is now classified as a tropical storm. Gasoline markets led the rally overnight as analysts expected oil production to return online faster than refineries in the region. RBOB futures are also seen holding in positive territory this morning as crude and ULSD futures pare gains. Now as markets steady, traders have turned their attention to the upcoming OPEC+ talks, but will also await updates on any damages reported due to the storm.  In outside markets, the S&P 500 was seen setting another record high today, continuing to find support from Fed Chair Powell’s comments last Friday.

Crude

• According to the Bureau of Safety and Environmental Enforcement, U.S. oil producers were seen shutting in 95% of oil production in the Gulf of Mexico as of Sunday. Oil production in the Gulf however only accounts for about 18% of total U.S. output.
• Colonial pipeline reported this morning that they expect to fully resume service after the company is able to assess the impact of Hurricane Ida.
• Sources familiar with the matter expect that OPEC+ will keep its production policy unchanged, continuing with its plan to increase production by 400,000 bpd.
• The October crude oil contract is trading $0.29 lower at $68.45. The 20-day and 100-day moving averages are $67.29 and $67.06 respectively. The 14-day RSI is 52.24%.
• As of 9:00 am CST: October Brent is down $0.23 at $72.47, the U.S. dollar index is 0.069 higher at 92.755 while the nearby e-mini S&P 500 futures contract is up 11.75 points at 4517.25.

Diesel

• ULSD futures are experiencing two sided trade this morning as traders try to analyze the effects of refinery shutdowns, with more information regarding outages and the colonial pipeline expected by midday.
• The September ULSD contract is trading $0.0001 lower at $2.1091. The 20-day and 100-day moving averages are $2.0656 and $2.0579, respectively. The 14-day RSI is 53.10%.

Gasoline

• Current gasoline inventories in the Padd 3 region are about 3% above the 5-year average, allowing from some cushion as production is lowered due to Hurricane Ida.
• The October RBOB crack was seen trading sharply higher overnight as concerns regarding refinery shutdowns and the colonial pipeline fuel the gasoline market.  
• GasBuddy expects that refinery outages due to Ida will cause retail gasoline prices to increase by 5 to 10 cents a gallon.
• The September RBOB contract is trading $0.0107 higher at $2.2849. The 20-day and 100-day moving averages are $2.0792 and $2.0208, respectively. The 14-day RSI is 55.52%.

Propane

• Steady to slightly lower this morning as the market seems to be taking direction from crude.
• At last look, Conway propane was trading down $0.01000 at $1.15000. Mt. Belvieu was trading unchanged at $1.14500.