Monday, November 2, 2009

Will the market finally show signs of weakness?

Normal market trends are for gasoline to show signs of weakness as the refiners switch to winter grade gas. End of year weakness will normally cause a contango'd market to carry through the heating season; but this year, unexpected refinery problems and scheduled turnaround have kept prompt supplies of gasoline tight.
"The momentum is for a down start to the week unless we see more bids come into the market on the prompt side," said one trader. Other traders said that the market should return to the "seasonal normal" trend, which means it should begin to go into a winter contango. "It depends on how much gasoline imports you see coming in last week and the first half of November," a second trader said. The general market consensus is that the gasoline imports last week should be above 800,000 b/d, following three weeks of sub-par import levels.
Other traders anticipate that arbitrage hasn't brought in significant imports and not much has changed. Overall, anticipate the market to maintain until we see inventory values on Wednesday morning.