Results

The Colonial Pipeline outages remains the issue of the day. Colonial did release a statement at 5:15 EDT but few hints were given as to the status. Outages are now present throughout the southeast and are moving northward. The nation has become accustomed to staying at home with remote work and learning. These skills may be needed as the crisis extends into day six. Drivers who only a short time ago left the fuel industry are being lured back with promises of significant bonuses if they are willing to make long hauls into the Colonial markets.

The Fuels markets were a mixed bag on Monday as traders tried to understand the implications of the Colonial Pipeline shutdown. The good news is the Cybercriminals behind the calamity are “apolitical” making all of those impacted breathe a collective sigh of relief (sarcasm implied). The key remains duration. Colonial stated their goal is to “substantially restor[e] operational service by the end of the week”.

Reality bit the Bulls on Thursday in the Fuels markets. Much of the recent run up has focused on the upcoming busy “driving season”. The thought was drivers would bust through their protective Covid bubbles, hop in a car, and burn some gasoline. The EIA’s Wednesday report cast doubts on those assertions with weak imputed demand. India’s ongoing Covid struggles keeps the Bulls from running completely rampant. The EIA data created additional misgivings. Friday’s attention will be on the US’ April non-farm payroll report and unemployment released at 8:30 am EDT.

The Bears won the battle on Wednesday in the Fuels market despite significant declines in product inventories. Estimates called for a 4MM barrel decline in Crude. The actual decline was 8 MM barrels. Gasoline inventories were on the mark with a 700K barrel increase. Like Crude, Distillates had a larger than expected decline of 2.9MM barrels versus expectations of a 1.6MM barrel decline. The recent push by the Bulls coupled with inventory declines could invite additional production by OPEC+. So, while the Bulls won Wednesday’s headlines, the Bears won the trading day.