In this week's Market Movers Americas, presented by Shea McCord:
* US crude industry awaits election results
* Gasoline cracks retreat, COVID resurgence threatens demand
* Higher temperatures could push up PJM prices
* US coal producers likely to report lower earnings
In this week's Market Movers: Hurricane Delta's impact on power demand and prices, the US Gulf Coast petroleum complex comes back online following the storm as US crude exports slide, and the United States debuts a new steel import monitor.
Delta is expected to lower power demand after it knocked out electricity service to thousands, which could decrease power prices as with other recent hurricanes. Outages totaled 575,000 on Oct. 10, the day after the storm made landfall, and were still above 200,000 on the morning of Oct.12. Warmer tropical air and precipitation will bring about lower electric heating loads in the PJM region, and ultimately put further downward pressure on power prices.
This week, the US oil complex is focused on restarting supply operations along the US Gulf Coast after the landfall of Delta on October 9. Prior to the storm, the Bureau of Safety and Environmental Enforcement estimated over 90% of offshore oil production was shut by October 8. Meanwhile, over 800,000 of the 2.4 million barrels/d of refinery capacity in Delta's path remained offline from storms before Delta's arrival. Combined with the closures of several ports near the Texas-Louisiana border, a vital outlet for crude and products, producers and refiners will be looking for clear recovery timelines.
The oil market will also be looking at crude export trends this week. Exports fell to 2.66 million b/d by October 2, according to the US Energy Information Administration, and could slip further amid a tighter arbitrage and thinning refining yields overseas. Platts Analytics sees US Gulf waterborne exports at just 2.1 million b/d by October 9, led by a drop in exports to Europe.
While crude exports have been steady to China, refinery margins in Europe have been favoring non-US crude grades. Platts Analytics data shows margins favoring West African Bonny Light and North Sea Forties over US export grade WTI MEH.
The Department of Commerce plans to debut an online platform on Oct. 13 for the US' Steel Import Monitoring and Analysis System, the first update since 2005. The updated SIMA system will offer free analytic tools to the public that allow for customized data analysis, which Commerce said will aid in the identification of changing trade patterns and surges in US imports of steel products. The move comes as the US, Mexico and Canada agreed to step up trade enforcement efforts with the adoption of the US-Mexico-Canada Agreement, which entered into force July 1.
For more on all the issues affecting commodity markets, check out Platts Live, a new section of our website that has been created for our customers to continue engaging with us, and each other. You can find it at the address displayed on your screen.
Thank you for kicking off your Monday with us and have a great week!