Gasoline Prices Higher as Hurricane Sandy might Disrupt Refineries

 
on October 29 2012 4:48 AM

With the lack of tier-1 economic data today, the focus is likely on Hurricane Sandy which is reported to have surpassed Hurricane Lili in 1996 as the second largest Atlantic storm over the past 24 years. The disruption has so far been significant: Traffics in the NYC have been affected with subways, buses and trains stopped running about 3 hours and over 3K flights cancelled. New York and New Jersey tunnels and bridges are highly likely to be closed tomorrow. Gasoline prices soared as the storm strengthened as refining companies began to evacuate staff. Companies such as Phillips 66, NuStar Energy and Hess said they are shutting or reducing output at New Jersey refineries.

In the Eurzone, the meeting between Spanish and Italian Prime Ministers’ today would show that split remains between the 2 debt-ridden countries. Italy’s Monti indicated last week his preference for Spain to seek a full bailout first as this would lower Italy’s borrowing cost. Monti blamed that Spain "has an elevated spread and has problems with its banking system" but it "has hesitated and is hesitating about whether to activate the anti-spread mechanism". Yet, Spain was reluctant to ask for financial assistance from international lenders. Rajoy said that the country was still assessing if the bailout would be inline with nation interest.

For this week, the BOJ meeting on Tuesday will likely announce further expansion of asset purchases. On Friday, the US employment report for October will be of main focus. The number of non-farm payrolls might have increased +120K in October, following a +114K addition last month. The unemployment rate probably climbed slightly to 7.9% in October from 7.8% in the prior month.

Commitments of Traders:

With the exception of natural gas, speculators were bearish towards the energy complex in the week ended October 23. Net length for crude oil slipped -20 091 contracts to 186 381 while that for heating oil dropped -8 731 contracts to 29 071. Net length for gasoline also fell -4 292 contracts to 69 761 while net short for natural gas slipped -1 906 contracts to 59 206.

Similarly, speculators were bearish towards precious metals during the week. Net length for gold future slipped -11 977 contracts to 182 043 while that for silver futures slid -1 992 contracts to 38 136. For PGMs, net length for platinum plunged -4 075 contracts to 43 601 while that for palladium dipped -1 486 contracts to 10 356.

 

 

 

 

 

 

 

 

Oil and Gold Reports contributed by Oil N' Gold

Share this article

More News from IBT MEDIA