NYMEX oil futures down over 60 cents a barrel, but spot market product differentials are getting bid up relative the NYMEX. Refinery problems abound.

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The NYMEX oil markets get pushed around by a lot of different groups-commodity funds, oil traders, hedge funds, international money, speculators, etc.

For a truer indication on oil industry 'insider info' on refinery problems its smart to watch the spot market differentials to the NYMEX screen. This is where oil traders and refiners actually sell excess supplies or buy operational shortfalls. Although crude futures took a dive today there are indications of more refining problems. First NYMEX gas cracks are moving up (gasoline economics are firming relative the crude). Also spot market differentials are firming, especially on gasoline.

The biggest spot market in the country is the Gulf Coast, meaning Colonial PL deals - the main line that runs to the Northeast). Those no-lead deals have firmed from 5.5 cents under the screen at the start of the week to 4 cents under- a good strong 2 day move.

The Chicago market has seen a substantial gasoline spot market move with diffs going from 2.50 under the NYMEX screen the end of last week to 2.50 over this afternoon. Thats a huge move but it is a thin (small) market so its easily pushed. There's 2 Clark refineries having problems in the Upper Midwest - Lima Ohio and Blue Island (Chicago suburb). Both probs surfaced pre-rollover. Shell Wood River (across from St Louis) cut crude runs after the rollover on a crude unit prob.

If you want more info, check out the petro forum over at EZ Board. I'll try post this spot market info on a regular basis when its substanitive.

Petro Forum Link

-- Downstreamer (downstream@bigfoot.com), January 05, 2000

Answers

i've heard to watch for shortages to appear in pricing in 2nd-3rd week of January

-- Ishkabibble (ishman@home.com), January 05, 2000.

Another spot market update at 4:30 CST.

Gasoline diffs are even firmer. Gulf Coast spot now up to 3.5 cents under the screen. Chicago gasoline spot also up to 3.50 cents over the NYMEX gasoline screen.

New York Harbor jet 10.5 cents over NYMEX heating oil and the 'arb' to Europe is still working meaning its still economical to buy NY pay freight and sell in Europe.

Shell Wood River claims they'll be back up to capacity by Friday.

-- Downstreamer (downstream@bigfoot.com), January 05, 2000.


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