Outlook: The energy complex has been mixed and choppy ahead of the Weekly Petroleum Status Report set to be released this morning. Yesterday afternoon an industry group reported that refined product inventories rose dramatically, which is weighing on the complex. Strong economic data from the U.S. and China has helped bring a layer of support to the market, however. Yesterday the International Monetary Fund stated that the unprecedented response from governments around the world to help combat the pandemic would help push global growth to 6% this year, which would be the highest level in about 40 years. Yesterday Iran and members of the 2015 nuclear accord held what was described as “constructive” discussions. The U.S. and Iran are attempting to revive the accord, which would allow Iran to increase crude oil production. Iranian crude is currently exempt from the OPEC+ agreement. Iran has the capacity to produce about 4 million bpd, but currently only produces about 2.35 million bpd. Equity markets are holding onto small gains this morning, with the S&P hovering near an all-time high. Investors are awaiting details from the Federal Reserve’s last policy meeting to be released, which is scheduled to happen later this morning.
Crude
- According to a report from the EIA, U.S. crude oil production is expected to fall by 270,000 bpd in 2021 to 11.04 million bpd. The previous forecast called for output to drop by 160,000 bpd.
- The Reuters poll of analysts and traders is expecting the EIA to report a 1.436 million barrel draw in U.S. crude oil stocks in the week ending April 2. Yesterday an industry group reported that U.S. crude stocks fell 2.6 million barrels last week.
- According to analysis from the Penn Wharton Budget Model, the corporate tax proposals in President Biden’s infrastructure plan would raise revenues by $2.1 trillion over 10 years. The infrastructure bill calls for $2.25 trillion in spending. On Monday the Senate parliamentarian ruled that Democrats in the Senate could use the budget reconciliation process for a second time this fiscal year, which would allow the infrastructure bill to pass through Congress with a simple majority.
- Europe’s medicines regulator announced a possible link between the AstraZeneca Covid-19 vaccine and rare blood clotting issues in those that received the shot. The World Health Organization and the U.K.’s medicines regulator have stated that the benefits outweighed the risks, however.
- The May crude oil contract is trading $0.12 lower at $59.21. The 20-day and 100-day moving averages are $61.61 and $53.86, respectively. The 14-day RSI is 45.97%.
- As of 9:18 am CST: June Brent is down $0.04 at $62.70, the U.S. dollar index is 0.032 lower at 92.303, while the nearby e-mini S&P 500 futures contract is up 3.50 points at 4,067.50.
Diesel
- The May ULSD contract is trading $0.0091 lower at $1.7850. The 20-day and 100-day moving averages are $1.8377 and $1.6268, respectively. The 14-day RSI is 46.79%.
- The Reuters poll of analysts and traders is anticipating that the EIA will report a 486,000 barrel build in U.S. distillate stocks for the week ending April 2.
- Yesterday afternoon an industry group reported that U.S. distillate stocks rose 2.8 million barrels last week.
Gasoline
- The May RBOB contract is trading $0.0080 lower at $1.9583. The 20-day and 100-day moving averages are $2.0026 and $1.7004, respectively. The 14-day RSI is 48.45%.
- The Reuters poll of analysts and traders is calling for the EIA to report a 221,000 barrel draw in U.S. gasoline stocks for the week ending April 2.
- Yesterday afternoon an industry group reported that U.S. gasoline inventories rose 4.6 million barrels last week.
Propane
- Propane prices are moving lower this morning. At last look, Conway propane was down $0.0400, trading at $0.8050. Mt. Belvieu was down $0.0075, trading at $0.8950.
- According to an OPIS survey of analysts and traders, U.S. propane inventories likely remained relatively flat last week. The survey produced a wide range of estimates, with draws as large as 750,000 barrels, and builds as large as 1.75 million barrels.
- The IHS Markit estimate is calling for the EIA to report a 405,000 barrel draw in propane inventories last week.
Natural Gas
- The May Natural Gas contract is trading $0.072 higher at $2.528. The 20-day and 100-day moving averages are $2.591 and $2.690, respectively. The 14-day RSI is 42.44%.
- Natural gas futures have risen off of 10-week lows as cooler weather and stronger industrial demand are expected over the next few weeks. Strong exports are also providing a layer of support, as the amount of natural gas moving to export facilities is on track to hit an all-time high this month.
According to the most recent data from the CDC, The U.S. has administered over 168 million Covid-19 vaccines. President Biden announced yesterday that since inauguration day, the U.S. has administered more than 150 million doses, which puts them on track to hit the 200 million doses by 100 days in office goal.
