Outlook: The energy complex has moved higher this morning as the market awaits a decision from OPEC. The Joint Ministerial Monitoring Committee is meeting today, while the oil ministers will meet tomorrow. According to a report from Reuters, OPEC+ is considering rolling the current production quotas into April instead of increasing output. It was expected that the group would increase production by 500,000 bpd in April, and that Saudi Arabia would end its voluntary 1.0 million bpd output cut, but now that may not be the case. The market will be keeping a keen on any announcements that come from OPEC+. Yesterday afternoon President Biden stated that the U.S. will have enough supply of Covid-19 vaccinations to inoculate every adult in the country by the end of May, which is two months earlier than anticipated. The announcement comes as the Johnson & Johnson vaccine has been granted an emergency use authorization, and the Biden administration works to increase production of the J&J vaccine. Merck, which is a large pharmaceutical company, will be helping with producing the J&J vaccine. Adding further support is an announcement from Senate Majority Leader Chuck Schumer. He stated on Tuesday that he has enough votes in the Senate to pass the $1.9 trillion coronavirus relief bill, and plans to move forward with the bill as early as today. If that were the case, the relief package could be voted on by as early as Friday. Schumer has indicated that the Senate will pass the bill before the March 14 deadline when unemployment benefits expire. Equities have had a mixed start to the session, as the DJIA has held onto relatively small gains, while the S&P 500 and the Nasdaq Composite are trading below even. Pressuring equities is the 10-year Treasury yield, which has gained about 6 basis points to 1.47%.
Crude
- This morning ADP released its Monthly Private Payrolls Report. They showed that U.S. companies added 117,000 positions in February. Economists polled by Dow Jones anticipated growth of 225,000 jobs. Manufacturing lost 14,000 jobs, while trade, transportation, and utilities led all sectors with 48,000 positions added.
- The Reuters poll of analysts and traders is anticipating that the EIA will report a 928,000 barrel draw in U.S. crude oil stocks for the week ending February 26. Yesterday an industry group reported that U.S. crude stocks rose a massive 7.4 million barrels last week.
- According to an industry report released yesterday afternoon, U.S. refinery run rates fell by 1.75 million bpd last week.
- The April crude oil contract is trading $1.18 higher at $60.93. The 20-day and 100-day moving averages are $59.71 and $48.80, respectively. The 14-day RSI is 60.14%.
- As of 9:12 am CST: May Brent is up $0.86 at $63.56, the U.S. dollar index is 0.203 higher at 90.988, while the nearby e-mini S&P 500 futures contract is down 21.00 points at 3,846.50.
Diesel
- The April ULSD contract is trading $0.0242 higher at $1.8323. The 20-day and 100-day moving averages are $1.7944 and $1.4718, respectively. The 14-day RSI is 63.28%.
- The Reuters poll of analysts and traders is estimating that the EIA will report a 3.035 million barrel draw in U.S. distillate stocks for the week ending February 26.
- Yesterday an industry group reported that U.S. distillate stocks fell 9.05 million barrels last week.
Gasoline
- The April RBOB contract is trading $0.0098 higher at $1.9462. The 20-day and 100-day moving averages are $1.8661 and $1.5163, respectively. The 14-day RSI is 75.82%. An RSI above 70% represents an overbought market from a technical perspective.
- The Reuters poll of analysts and traders is predicting that the EIA will report a 2.30 million barrel draw in U.S. gasoline stocks for the week ending February 26.
- Yesterday afternoon an industry group reported that U.S. gasoline inventories fell 9.9 million barrels last week.
Propane
- Propane prices are mostly unchanged this morning. At last look, Conway propane was up $0.0025, trading at $0.9000. Mt Belvieu was unchanged, trading at $0.9700.
- An OPIS survey of analysts and traders is predicting that the EIA will report a 2.3 million barrel draw in U.S. propane stocks for the week ending February 26.
- IHS Markit is anticipating a much smaller draw of 94,000 barrels due to a quick recovery in supply and lower demand last week.
Natural Gas
- The April Natural Gas contract is trading $0.011 higher at $2.850. The 20-day and 100-day moving averages are $2.868 and $2.750, respectively. The 14-day RSI is 53.16%.
- Tomorrow morning at 9:30am CST The EIA will release its Weekly Natural Gas Storage Report.
- Natural gas futures have hit a one-week high as some cold weather has started to creep back into the forecast. In both the NOAA’s 6-10 day and 8-14 day forecast, colder than average temperatures for most of the western half of the country are anticipated.
