Market Insights

September 16, 2016 • Posted in Market Insights

Week of September 12, 2016

 

  • Hurricane Hermine and several tropical storms caused U.S. offshore drilling activity to shut down and hampered the movement of tanker shipments last week causing both imports and domestic production of oil and distillates to drop dramatically
  • As a direct result the U.S. Energy Information Agency reported the largest weekly draw on US oil inventories in 17 years on Thursday causing prices to fly up to $50 (Brent)
  • The market corrected quickly and oil fell back to $48 (Brent) by Saturday
  • Inventories are expected to gradually replenish and the main driver of volatility in the coming weeks will be the meeting at the end of this month in Algeria between OPEC members, Russia and other major oil producers
  • Natural gas prices also moved higher to $2.80 MMBtu NYMEX on Thursday due to relatively strong seasonal demand and lower-than-expected inventory build

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