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US refinery strike might be nearing an end

Published Friday, March 13th, 2015

An upside correction in the weakening of the euro failed to put a break on the slide in oil prices. After the bearish crude statistics on US oil inventories on Wednesday, Genscape yesterday reportedly estimated a relatively big build in Cushing inventories once again. This sent the price of WTI more than $1/bbl lower. As the Libyan and Iraqi tension helped Brent to lose ‘only’ 46 cents/bbl on the day the WTI/Brent arbitrage dipped below the -$10/bbl mark again and the front-month WTI spread closed below -$2/bbl for the first time in more than 4 years.

Not that products fared any better. A tentative deal has been apparently reached between oil companies and the United Steelworkers union to end the biggest refinery strike of the last 35 years in the US. Details are sketchy but the union is said to assemble its policy committee for a review of the proposals from the oil companies. As a result Heating Oil lost 413 points and RBOB 169 points on the day.

The weaker dollar helped the US stock market to recover some of the 3.5% losses it has suffered since the beginning of March. Yesterday’s rally that took the S&P 500 index up 1.26% was also aided by a bigger-than-expected fall in US jobless claims that was down to 289,000 versus an estimate of 305,000.

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Posted by David Hufton