Outlook: The energy complex is trading in the green this morning, making up for some of yesterday’s drastic losses. Yesterday the market saw crude oil lose around 6% and products around 4-5%. Concerns regarding Covid-19 had seeped into the energy complex as traders expect demand recovery to remain slow for now. Covid-19 headlines related to the EU have caused the most pressure on the market recently. German Chancellor Merkel stated this morning that the new British variant is more dangerous to young people. Today markets are underpinned by reports of a ship running aground in the Suez Canal, blocking passage for vessels in one of the most important maritime trade routes. This event is raising temporary supply concerns, helping to balance out with the current demand woes. Overall market sentiment remains bearish, but the market seems to be taking a slight breather after yesterday’s plunge lower.
- Eight tugboats were reportedly attempting to move the 400 meter ship that ran aground in the Suez Canal, blocking passage for other vessels. The marine agent GAC stated that the giant container ship is now partially refloated.
- Pfizer has announced that they would begin an early-stage clinical trial for an oral anti-viral drug that would help treat newly infected Covid patients outside of a hospital.
- The Reuters poll of analysts and traders is predicting that the EIA will report a 900,000 barrel draw in U.S. crude oil stocks for the week ending March 19. Yesterday an industry group reported a build of 2.9 million barrels.
- The May crude oil contract is trading $1.88 higher at $59.64. The 20-day and 100-day moving averages are $62.75 and $52.04, respectively. The 14-day RSI is 44.17%.
- As of 8:25 am CST: May Brent is up $1.73 at $62.52, the U.S. dollar index is 0.229 higher at 92.565, while the nearby e-mini S&P 500 futures contract is up 12.5 points at 3,912.25.
- The April ULSD contract is trading $0.0392 higher at $1.7881. The 20-day and 100-day moving averages are $1.8705 and $1.5727, respectively. The 14-day RSI is 44.30%.
- The Reuters poll of analysts and traders is predicting that the EIA will report an 11,000 barrel draw in U.S. distillate stocks for the week ending March 19. Yesterday an industry group reported that distillate stocks had risen by 246,000 barrels.
- U.S. manufactured durable goods orders were seen falling by 1.1% in February while analysts had expected a 0.8% increase.
- The April RBOB contract is trading $0.0328 higher at $1.9292. The 20-day and 100-day moving averages are $2.0054 and $1.6341, respectively. The 14-day RSI is 46.33%.
- Yesterday’s losses in the RBOB market were less than that of the crude market, helping to push the benchmark contract’s board crack up by about $1.10.
- The Reuters poll of analysts and traders is anticipating that the EIA will report a 1.10 million barrel build in U.S. gasoline stocks for the week ending March 19. Yesterday a trusted industry group reported that gasoline stocks had fallen by 3.7 million barrels.
- Propane prices are lower this morning. At last look, Conway propane was down $0.0200, trading at $0.8200. Mt. Belvieu was down $0.0150, trading at $0.8950.
- Currently a combination of increased production, slow exports, and decreasing winter demand is making it difficult for this market to remain overly bullish. Low inventories however should continue to support price levels.
- The April Natural Gas contract is trading $0.027 higher at $2.535. The 20-day and 100-day moving averages are $2.681 and $2.716, respectively. The 14-day RSI is 40.00%.
- The EIA will release its Weekly Natural Gas Storage Report on Thursday. Over the last five years, inventories have fallen on average 51 Bcf on the March 19 report.
The grounded vessel in the Suez Canal has caused the delay of dozens of ships on both ends of the canal. 100 vessels are said to be waiting to transit between the Red Sea and Mediterranean.
|As of 8:25 AM CST||WTI May||ULSD April||RBOB April||Nat Gas April|