Concern about demand related to current restrictions brought about due to increasing Covid cases so far has outweighed over the support from positive vaccine headlines. Tensions between China and the U.S. is also pressuring the markets. Reuter’s released a report stating that three sources attested to the U.S. preparing new sanctions on China as early as today. The sanctions are expected to be imposed on at least a dozen Chinese officials, as they are believed to have held a role in disqualifying elected opposition legislators in Hong Kong. As last week’s OPEC+ meetings led to a decision, satisfying traders, the markets have now turned their attention back onto Covid-19 headlines. We are now seeing new lockdown measures being put in place in California, Germany and South Korea. As for vaccine news, the U.K. is expected to start distributing the first doses of Pfizer’s vaccine starting tomorrow. The U.S. still awaits vaccine approval with President Trump’s Covid vaccine czar expected to meet with Joe Biden this week in order to discuss this month’s vaccine rollouts. Equities this morning are also seen slipping due to rising Covid cases as traders keep an eye on any headlines regarding additional coronavirus aid. Congress is working towards passing a $908 billion bipartisan aid bill that was proposed early last week.
Crude
• According to Chinese customs data, China’s November crude oil imports were seen rising from a month earlier. Imports were reported at 11.04 million bpd vs 10.02 million in October. The report also showed China’s floating storage levels to be dropping as purchases have begun to slow.
• Iran’s state media reported yesterday that Iran has instructed its oil ministry to be prepared to produce crude oil at full capacity within three months. The nation believes that they will see a possible easing of U.S. sanctions if Joe Biden takes office. Currently it is estimated that Iran exports less than 300,000 bpd of oil compared to its peak of 2.8 million bpd in 2018.
• OPEC+ is likely expected to hold their next policy meeting on January 4th, according to two sources close to the matter. The upcoming meeting will decide on the next production adjustments which cannot exceed more than 500,000 bpd a month.
• Last Friday’s CFTC Commitment of Traders report showed WTI crude oil specs to be sellers of 5,213 contracts. Their new net position now sits at 544,959 contracts.
• The January crude contract is trading $0.52 lower at $45.74. The 20-day and 100-day moving averages are $43.37 and $41.66, respectively. The 14-day RSI is 64.25%.
• As of 9:15 am CST: February Brent is down $0.49 at $48.76, the U.S. dollar index is up 0.064 trading at 90.765 pts, while the nearby e-mini S&P 500 futures contract is down 4 points at 3694.
Diesel
• January ULSD is down $0.0089, trading at $1.3941. The 20-day and 100-day moving averages are $1.3132 and $1.2467, respectively. The 14-day RSI is 67.33%. An RSI above 70% indicates an overbought market from a technical perspective.
• Last Friday’s CFTC Commitment of Traders report showed heating oil specs to be buyers of 6,310 contracts. Their new net position now sits at 20,432 contracts.
Gasoline
• January RBOB is trading $0.0164 lower at $1.2521. The 20-day and 100-day moving averages are $1.2028 and $1.1541, respectively. The 14-day RSI is 59.54%.
• According to a report by OPIS, U.S. gasoline consumption during the Thanksgiving holiday week was seen falling to its lowest value since 1997. Demand for the holiday week was seen falling by 8.4% compared to the week prior, and down by 19.3% compared to 2019.
• Last Friday’s CFTC Commitment of Traders report showed RBOB specs to be sellers of 4,549 contracts. Their new net position now sits at 60,271 contracts.
Propane
• Propane prices are up this morning. At last look Conway was up $0.0025, trading at $0.5675. Mt. Belvieu was up $0.0050, trading at $0.6025.
• The NOAA has forecast a high probability of warmer than average temperatures for much of the country in its 6-10 day forecast. The 8-14 day forecast shows an even higher probability of above average temperatures for nearly the entire country.
Natural Gas
• January Natural Gas is down $0.191 at $2.384. The 20-day and 100-day moving averages are $2.851 and $3.154, respectively. The 14-day RSI is 27.39%. An RSI below 30% represents an oversold market from a technical standpoint.
• Last Friday’s CFTC Commitment of Traders report showed natural gas specs to be buyers of 14,300 contracts. Their new net position now sits at 39,816 contracts.
