Breaking News

Hurricane Stocks

By Phil FlynnCommoditiesOct 11, 2018 09:29AM ET
Hurricane Stocks
By Phil Flynn   |  Oct 11, 2018 09:29AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items

Hurricane Michael, one of the most powerful U.S. hurricanes on record, is delivering a devastating punch to the Southeastern United States and the U.S. stock market, delivering a punch to the nation’s portfolios. Oil prices followed stocks lower and any fear that Gulf of Mexico Oil infrastructure would be damaged went away with the wind. Even as the Bureau of Safety and Environmental Enforcement (BSEE) reported that 42.3 percent of the oil production and 31.7% of the natural gas production was shut- in the Gulf of Mexico, already oil companies are starting to try to bring that production on line. That does not mean that Hurricane Michael is over. It is not by a longshot. The oil market is trying to balance the short-term demand destruction impact from the storm to the longer-term demand bump when we will have to spend billions of dollars to rebuild. Yet, the market can’t focus on that just yet with a plunging stock market raising fears about demand and getting blindsided with a bearish American Petroleum Institute (API) supply report. It also is fearing the drop in stocks that overshadowed looking out beyond the storm.

What? Did all the refineries shut down? The API looks like they did as they reported a 9.75-million-barrel crude supply increase, the biggest increase since February of 2017. Now part of that increase might be refinery maintenance and restrained pipeline capacity going out of Cushing Oklahoma. The API reported that supply in Cushing surged by 2.3 million barrels the largest increase since March 2018. Yet in the products we saw refiners lose ground on distillate supply. The API reported a 3.5-million-barrel drop in that category, the biggest fall since 2018. Refiners have been working hard trying to beef up those stocks but are now falling behind. This is going to be a larger concern as winter is approaching. In contrast, gasoline supply increased by 3.4 million barrels. Gasoline will see demand drop short term because of the storm.

Bottom line is that Hurricane Michael will increase oil demand expectations in the fourth quarter when supplies will be at their tightest level in decades. Despite the stock market turmoil, the fundamental outlook for oil demand has not changed that dramatically. Distillate supplies are still below average. Iranian oil output is falling. There are still risks to future production. The demand growth will continue to rise.

Michael left a trail of destruction in its wake across the central Florida Panhandle, especially along and near the coastal stretch from Panama City to Apalachicola. One death had been reported as of Wednesday evening. Mexico Beach, which encountered the worst of Michael's dangerous right-hand-side eyewall, appears to have been particularly hard hit, as was Tyndall Air Force Base, which reported "extensive damage"

Hurricane Stocks
Hurricane Stocks

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Jose Joseph
Jose Joseph Oct 11, 2018 2:23PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
This guy was asking to go long even when the price was above $76.
0 0
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email