Oil and product disconnected a bit yesterday due in part to strong Asian demand and in part because of a refinery issue. Bloomberg reported that Valero Energy Corp. said the sole fluid catalytic cracker at its McKee refinery in Texas may be shut until at least the middle of July for repairs after an upset yesterday. The plant receives feedstock from northern Texas, Oklahoma, Kansas and eastern Colorado. It obtains oil from storage in Cushing, Oklahoma, the delivery hub for Nymex’s crude contract, according to Valero’s website. That means of course that supply may continue to rise in Cushing putting future downward pressure on NYMEX and helping the premium in the Brent. Natural Gas gave is a bit of a bullish surprise when the Energy Information Agency reported that a smaller than expected injection of 87 Bcf. Stocks were 2 Bcf higher than last year at this time and 313 Bcf above the 5-year average of 2,230 Bcf.
This weekend will be hot so gas demand will be strong. The Atlantic is getting slightly more active then yesterday with a new disturbance to watch that currently has a 20% chance of becoming a hurricane.
Phil Flynn is senior energy analyst for PFGBest Research and a Fox Business Network contributor. He can be reached at (800) 935-6487 or at firstname.lastname@example.org