In the aftermath of Harvey and not quite yet for Irma we reach a new phase of the recovery in the Greater Houston area and Florida. This is a reminder and testament to the American Spirit as we remember this solemn day and what happened 16 years ago in New York, Washington D.C. and Shanksville Pennsylvania. Again this country shows how in can come together in times of crisis and resuscitate the people and economies of our neighbors when they are in dire need. We still have to contend with Hurricane Jose which is a Category 2 with Sustained Winds at 90 knots and movement north-northwest at 9 knots. This can be a tricky storm as the cone is moving in a circular motion but most likely will hit the eastern U.S. coast and still a possibility to hit Florida. We also have another Tropical Disturbance lurking in the Atlantic several hundred miles west-southwest of the Cabo Verde Islands. We will be monitoring these storms very closely. Once again on this Solemn Day we salute our Men and Woman of our Armed Forces.
On the Corn front we have Export Inspections at 10:00 A.M. and Export Sales at 3:00 P.M. Central. We could use some rains but we may get a little more than we bargained for after we will get remnants from Irma later in the week. Tomorrow we have the monthly Crop Production USDA Supply/Demand data. A change in weather forecast starting Friday calling for frost is now forecasting temperatures in the 80’s.One thing is for sure we do have a goofy weather pattern that follows the entire year of 2017. In the overnight electronic session the December Corn is currently trading at 355 ¼ which is 1 ½ of a cent lower. The trading range has been 357 ¾ to 355.
On the Ethanol front the October contract posted a trade at 1.533 which is .002 of a cent lower. The market is currently showing 1 bid @ 1.512 and 2 offers @ 1.534 with Open Interest at 932 contracts.
On the Crude Oil front we may see demand climb as First Responders need to get as much Energy to hurry recovery in the Hurricane torn regions so people can safely get about and about and access their damage. But at the moment it is too early to leave your shelter and listen to government agencies warnings in aiding in reconstruction. In the overnight electronic session the October Crude Oil is currently trading at 4767 which is 19 points higher. The trading range has been 4794 to 4757.
On the Natural Gas front the market is coming in higher this morning in shoulder season. A warmup called for the Mid-West later in the week and possible supplies need has investors looking to buy value. In the overnight electronic session the October Natural Gas is currently trading at 2.915 which is 2 ½ cents higher. The trading range has been 2.937 to 2.899.
— Daniel Flynn
The Energy Report: The road to normal
Already in the aftermath of Hurricane Irma, the market is looking ahead to the road to normal. Already the focus in oil seems to be shifting away from demand destruction to the surge in demand we will get when we start to rebuild. U.S. refineries are coming back on line from Hurricane Harvey to only 6% off line, down from over 25% after the storm. Early reports say that Hurricane Irma’s impact on Florida was not as bad as it could have been and so the market can look ahead.
Natural gas demand may take the biggest hit as Hurricane Irma knocked out power to more than 3 million homes and businesses and Reuters reports that full restoration of service could take weeks. Yet the damage to buildings actually will be bullish for oil and oil product demand in the rebuilding phase. While we are not in the all clear as the Atlantic is still active from a weather standpoint, the market will start focusing on the rebuilding with strong demand for many petroleum products.
Oil prices are also getting support from a move by Saudi Arabian Energy Minister Khalid al-Falih to extend the oil production cut this past March when the deal expires. He met with Venezuela and Kazakh this weekend and still has to bring on board Russia who has so far balked at an extension of cuts. Yet if the rest of the OPEC cartel agrees, the Russians will most likely get on board.
Gasoline prices may start to level out as refiners come back on line. We may start to see a reversal on the Brent/WTI spread and oil up versus products down.
Make sure you are getting the Power to Prosper! Stay tuned to the Fox Business Network! I’m headed to Dallas this October along with more than 50 of the world’s leading financial experts. We’ll be discussing the state of the economy, how politics are impacting the markets, and much more. And I’d love for you to join us. Reserve your free spot!
— Phil Flynn
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