Outlook: The energy complex has pushed aggressively higher this morning, as crude and products are all trading well above even. Crude is up over $1 per barrel, April RBOB is trading up about 5 cents on the day, and nearby ULSD is up about 2.5 cents. Large draws in refined products as reported by the EIA yesterday morning have brought some upward momentum to the complex. A weakening dollar is also providing some support, as treasury yields have retreated from recent highs, easing investors worries of inflation. Yesterday the U.S. Department of Labor reported that the Consumer Price Index for February rose 0.4%. The CPI was mostly in-line with economists estimates. Yesterday the U.S. House of Representatives passed the $1.9 trillion Covid-19 relief bill. The bill will now be sent to President Biden for approval. Biden is expected to sign the bill on Friday, as unemployment benefits expire on March 14. Those who qualify for the $1,400 direct payments could start seeing them hit their bank account via direct deposit before the end of the month. Biden is also expected to give his first primetime address this evening, where it is expected that he will lay out the administration’s plan for combatting the pandemic going forward. Today marks the 1 year anniversary of widespread coronavirus-caused lockdowns. Equities are having another record session, as a slightly better than expected jobless claims report is providing a layer of support to the sector. The DJIA is up about 300 points and has hit another intraday record high.
Crude
- Pfizer and BioNTech stated yesterday that real-world data from Israel suggests that their Covid-19 vaccine is 94% effective in preventing asymptomatic infections. The vaccine also shows a 97% efficacy rate in preventing symptomatic infection. According to the data, unvaccinated individuals were 44 times more likely to develop Covid-19 symptoms, and 29 times more likely to die from the virus when compared to those that have been vaccinated.
- In their monthly report, OPEC has forecast that oil demand will rise by 5.89 million bpd in 2021, which is an increase of about 6.5% from the year earlier. Most of that increase in demand will occur in the second half of the year, according to the report. OPEC also raised its forecast for world economic growth from 4.8% to 5.1%.
- The U.S. Department of Labor reported this morning that first time claims for unemployment totaled 712,000 for the week ending March 6. Economists polled by Dow Jones anticipated 725,000 first time claims. The record high for first time claims prior to the pandemic was 695,000. Continuing claims fell once again, down to 4.1 million.
- The Johnson & Johnson single-dose vaccine has been approved for use in the EU, according to CNBC. The EU Commission gave formal approval for the vaccine today. The EU has ordered 200 million doses of the vaccine, with an option for 200 million more.
- Saudi Arabia has delivered on nearly all of the voluntary 1.0 million bpd output cut, according to a monthly report from OPEC. Saudi Arabia has stated that oil production fell 956,000 bpd in February to 8.147 million bpd. The 1.0 million bpd cut was extended into April in the most recent OPEC+ meeting.
- The April crude oil contract is trading $1.21 higher at $65.65. The 20-day and 100-day moving averages are $62.05 and $50.17, respectively. The 14-day RSI is 67.57%.
- As of 10:05 am CST: May Brent is up $1.43 at $69.33, the U.S. dollar index is 0.222 lower at 91.601, while the nearby e-mini S&P 500 futures contract is up 43.75 points at 3,940.25
Diesel
- The April ULSD contract is trading $0.0252 higher at $1.9425. The 20-day and 100-day moving averages are $1.8551 and $1.5132, respectively. The 14-day RSI is 71.65%. An RSI above 70% typically represents an overbought market from a technical perspective.
- Yesterday morning the EIA reported that U.S. distillate stocks fell 5.505 million barrels last week. Distillate demand rose 699,000 bpd to 4.487 million bpd, while exports fell 345,000 bpd to 475,000 bpd.
Gasoline
- The April RBOB contract is trading $0.0515 higher at $2.1310. The 20-day and 100-day moving averages are $1.9559 and $1.5614, respectively. The 14-day RSI is 85.78%.
- Yesterday morning the EIA released its Weekly Petroleum Status Report and showed that U.S. gasoline inventories fell a whopping 11.868 million barrels last week. Gasoline demand rose dramatically, increasing by 578,000 bpd to 8.726 million bpd.
Propane
- Propane prices are slightly mixed this morning. At last look, Conway propane was down $0.0025, trading at $0.8325. Mt Belvieu was up $0.0050, trading at $0.9225.
- Yesterday morning the EIA reported that U.S. propane inventories fell a modest 47,000 barrels in the week ending March 5. Propane demand fell 349,000 bpd to 1.138 million, while exports rose 371,000 bpd to 1.123 million bpd.
Natural Gas
- The April Natural Gas contract is trading $0.010 lower at $2.682. The 20-day and 100-day moving averages are $2.821 and $2.738, respectively. The 14-day RSI is 43.06%.
- This morning the EIA reported that U.S. natural gas inventories fell 52 Bcf in the week ending March 5. Natural gas inventories are 257 Bcf less than last year at this time, and 141 Bcf below the five-year average.
