Outlook: The energy complex has pushed higher this morning after trading both sides of even earlier in the session. Providing a layer of support is the news that the AstraZeneca vaccine has been found to be 79% effective in preventing symptomatic illness. The findings of a large U.S. trial have also shown that the vaccine is 100% effective against severe disease and hospitalization as well. The results were based on 32,449 participants across 88 trial centers in the U.S., Peru, and Chile. Participants who received the vaccine in the trial had no increased risk of blood clots or related illnesses. AstraZeneca is preparing to submit the vaccine to the U.S. Food and Drug Administration for an emergency use authorization. The FDA has stated previously that they are willing to grant an authorization for any vaccine that has been proven to be safe and is at least 50% effective, signaling that the two-dose AstraZeneca shot is likely to be added to the current arsenal of vaccines in the coming weeks. Despite the potential for another vaccine option here in the U.S., lockdowns in Europe are continuing to weigh on the demand recovery outlook. Parts of the continent are entering a “third wave” of the virus, and are having to go back into lockdown in order to slow the spread. France, Poland, and Ukraine all implemented stricter measures over the weekend. Equities are pushing higher this morning as well, as all three major averages are trading well above even.
Crude
- Saudi Aramco CEO Amin Nasser stated on an earnings call that he expects global oil demand to reach 99 million bpd by the end of the year. Saudi Aramco is planning to scale back capital expenditures this year to make up for weaker profits the year prior. Capital expenditures are scheduled to be around $35 billion this year. Net profit fell 44.4% to $49 billion in 2020, down from about $88 billion in 2019.
- Microsoft said that it will allow employees at its Redmond, Washington location to choose between returning to work full-time, continuing to work remotely, or implement a hybrid model beginning on March 29.
- On Friday afternoon Baker Hughes released its weekly Rig Count Report. They showed that U.S. producers added 9 oil rigs, bringing the total up 318. The oil rig count is still down 346 from this time last year.
- On Friday the CFTC released its weekly Commitments of Traders Report. They showed that funds and money managers sold 11,452 crude oil contracts in the week ending March 16, reducing net length to 574,694 lots.
- Today is the last day for April crude oil. The May has become the more heavily traded contract. The May crude oil contract is trading $0.35 higher at $61.79. The 20-day and 100-day moving averages are $63.14 and $51.67, respectively. The 14-day RSI is 51.03%.
- As of 10:23 am CST: May Brent is down $0.08 at $64.46, the U.S. dollar index is 0.057 lower at 91.862, while the nearby e-mini S&P 500 futures contract is up 24.00 points at 3,923.75.
Diesel
- The April ULSD contract is trading $0.0131 higher at $1.8354. The 20-day and 100-day moving averages are $1.8848 and $1.5607, respectively. The 14-day RSI is 49.45%.
- On Friday the CFTC released its weekly Commitments of Traders Report and showed that funds and money managers purchased 2,901 heating oil contracts, increasing net length to 7,911 lots.
- According to TSA checkpoint data, over 1.54 million passengers went through airport security on Sunday. On the same day last year, only 548,132 passengers were reported. Despite the nearly 3-fold increase, air travel demand is still well off pre-pandemic levels, as over 2.2 million people went through airport security on March 21, 2019.
Gasoline
- The April RBOB contract is trading $0.0267 higher at $1.9678. The 20-day and 100-day moving averages are $2.0160 and $1.6147, respectively. The 14-day RSI is 51.63%.
- In its weekly Commitments of Traders Report, the CFTC showed that funds and money managers purchased 999 RBOB contracts, increasing net length to 47,696 lots.
Propane
- Propane prices are moving higher this morning. At last look, Conway propane was up $0.0150, trading at $0.8400. Mt. Belvieu was up $0.0250, trading at $0.9100.
- The NOAA is showing in both the 6-10 day and 8-14 day weather outlook that temperatures throughout the country will be close to average. By the first week of April, temperatures here in the Twin Cities are in the mid-60’s. Propane demand did increase in the week ending March 12, according to the most recent EIA report. As we have now entered Spring, demand is likely to contract and inventories may begin building.
Natural Gas
- The April Natural Gas contract is trading $0.002 lower at $2.533. The 20-day and 100-day moving averages are $2.674 and $2.708, respectively. The 14-day RSI is 38.03%.
- On Friday the CFTC released its weekly Commitments of Traders Report. They showed that funds and money managers sold 38,428 natural gas contracts in the week ending March 16. Funds are now net short 39,269 lots.
On Friday the U.S. topped 100 million Covid-19 vaccine doses administered, according to data from the CDC. Around 35 million people have been fully vaccinated, which is about 13.5% of the adult U.S. population. The Biden administration is pushing for 200 million doses by the 100th day in office. The U.S. is administering about 2.5 million doses each day.
