Outlook: The energy complex has continued to push higher despite rising Covid-19 cases. Case counts here in the U.S. have continued to rise in recent weeks, with the seven-day average number of cases increasing by 10% when compared to the week prior, according to data from Johns Hopkins University. Adding some downside pressure comes from the announcement that the U.S. has suspended the Johnson & Johnson vaccine due to a rare blood clotting issue. Despite the setback, U.S. health officials have stated that the FDA’s recommended pause of the J&J vaccine will not slow down the vaccination campaign. Pfizer CEO Albert Bourla said yesterday that the company has increased production of its two-shot vaccine and will be able to deliver 10% more doses to the U.S. by the end of May than it had previously agreed to. The 10% increase will push total doses up to 220 million from Pfizer. This morning the International Energy Agency stated that vaccine rollouts are brightening the outlook for global oil demand. They also stated that fundamentals look “decidedly stronger” according to a report from Reuters. The IEA is predicting a significant rise in global oil demand in the second half of the year, which will in turn pressure inventories lower. The IEA expects crude oil producers to have to pump an additional 2 million bpd in the second half of the year in order to keep up with demand. Equity markets are having a mixed session thus far. The DJIA and the S&P 500 have held onto moderate gains, while the Nasdaq Composite has traded both sides of even.
Crude
- Yesterday afternoon it was reported that Moderna’s covid-19 vaccine was over 90% effective at protecting against Covid up to six months after the second dose. It was also more than 95% effective against severe disease within that same time frame. Moderna hopes to have a Covid booster shot available by the fall, according to the company’s CEO Stephane Bancel. The goal would be that the booster would further protect against the variants of the virus.
- This morning the EIA will release its Weekly Petroleum Status Report. The Reuters poll of analysts and traders is estimating that the EIA will report a 2.889 million barrel draw in U.S. crude oil stocks for the week ending April 9.
- Yesterday afternoon an industry group reported that U.S. crude oil stocks fell 3.61 million barrels last week.
- The May crude oil contract is trading $1.31 higher at $61.49. The 20-day and 100-day moving averages are $60.34 and $54.75, respectively. The 14-day RSI is 53.04%.
- As of 9:14 am CST: June Brent is up $1.39 at $65.06, the U.S. dollar index is 0.074 lower at 91.778, while the nearby e-mini S&P 500 futures contract is up 7.50 points at 4,140.25.
Diesel
- The May ULSD contract is trading $0.0378 higher at $1.8523. The 20-day and 100-day moving averages are $1.8077 and $1.6540, respectively. The 14-day RSI is 55.12%.
- The Reuters poll of analysts and traders is predicting that the EIA will report a 971,000 barrel build in U.S. distillate stocks for the week ending April 9.
- Yesterday afternoon an industry group reported that U.S. distillate inventories fell 3.01 million barrels last week.
Gasoline
- The May RBOB contract is trading $0.0145 higher at $1.9902. The 20-day and 100-day moving averages are $1.9690 and $1.7334, respectively. The 14-day RSI is 53.61%.
- The Reuters poll of analysts and traders is estimating that the EIA will report a 786,000 barrel build in U.S. gasoline inventories for the week ending April 9.
- Yesterday an industry group reported that U.S. gasoline stocks rose 5.57 million barrels last week.
Propane
- Propane prices are slightly mixed this morning. At last look, Conway propane was up $0.0050, trading at $0.7200. Mt. Belvieu was down $0.0025, trading at $0.7850.
- According to an OPIS survey of analysts and traders, the EIA is likely to report a 608,000 barrel build in U.S. propane stocks for the week ending April 9.
- The IHS Markit estimate is calling for a 300,000 barrel build in U.S. propane stocks.
Natural Gas
- The May Natural Gas contract is trading $0.008 higher at $2.627. The 20-day and 100-day moving averages are $2.574 and $2.679, respectively. The 14-day RSI is 51.53%.
- U.S. natural gas futures have risen to a four-week high this morning. Record high exports and forecasts for cooler weather have helped boost futures values. According to Reuters, the amount of natural gas moving to export facilities has averaged 11.0 bcfd thus far in April, which is slightly above the all-time high of 10.8 bcfd achieved in March.
