Oil And negative sentiment

WTI -4% brent -3.37%,Gasoline -3.9% and Heating oil -2.9%.

Both Crude And brent headed for worst percentage drop of the Year.Couple of reasons

  1. Caterpillar warning of Slower Global growth
  2. private data Forecasters calling for a hefty build in Cushing Stocks this week
  3. A Pipeline Carrying oil from permian to gulf coast expected to open sooner then initially planned.This could be causing issues with Spread relationships between the Different grades of Oil.Midland oil,proxy for periman supply down over 6% today and the spread with WTI having its first substantial drop in value since first week of year.The mars blend of Oil somewhat similar to the Venezuelan grades is down 7% today biggest drop since Christmas.less worries about supply Disruption causing a bit of selling in the Sour grade.
  4. cargoes of oil from North Sea expected to increase by 1=More supply
  5. Consistent issues; RBOB crack continue to trend lower at Multi year lows,Rig count from last week reported 1st increase this year and net Longs in brent at 2 month high,always a good contrarian indicator.

Energy Sector -1.73% second worst performer in SPX,Just a bit behind information tech,showing losses of 1.92% Only sector positive is real Estate. Nvidia -13% Cat -9.5% both off session lows,but still trading heavy. Stock market was looking to the Event risk later this week and got blindsided vy the Warnings this morning.

Pipeline story from Reuters

Enterprise Products Partners has begun the first steps to convert its NGL pipeline to crude service out of the Permian basin, a spokesman said on Thursday. The startup of the Shin Oak pipeline, expected in the second quarter of 2019, would provide Enterprise the option to divert NGL volumes from one of its existing NGL pipelines onto Shin Oak and repurpose the vacated NGL pipeline to crude oil service.

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