Outlook: The energy complex has continued to push higher today, as crude and products are all trading well above even. Easing lockdowns in the U.S. and Europe continue to help elevate futures values. Strong vaccine rollouts in the U.S. have also added a layer of support to the complex, as more than 40% of the country has received at least one dose of a Covid-19 vaccine. Yesterday President Biden set two new vaccination goals for July 4. The first being getting 70% of U.S. adults to receive at least one dose. The second goal is to have 160 million adults fully vaccinated by that same date. According to the latest CDC data, the U.S. would hit those goals by mid-June if current vaccination rates held steady, but the seven-day average number of inoculations has fallen 35% in two weeks. Vaccine hesitancy and a preference for the Johnson & Johnson single-dose shot will be barriers to overcome. Equities are bouncing back after the sell-off that was experienced yesterday. U.S. companies continue to report much stronger earnings in Q1 than anticipated, with the latest being General Motors. Despite the global shortage of semiconductor chips that has caused production issues in the auto industry, GM reported first-quarter earnings that blew past expectations. GM reported earnings of $2.25 per share, while industry expectations had anticipated $1.04 per share.
- This morning ADP reported that private payrolls grew by 742,000 in April. Economists polled by Dow Jones anticipated 800,000 new jobs. The leisure and hospitality industry led all sectors with 237,000 new positions added.
- Saudi Aramco has cut the official selling price for all crude grades that it sells to Asia in June, according to a report from Reuters. The flagship Arab light grade crude is being set at $1.70 per barrel above the Oman/Dubai average for Asia, which is down 10 cents from May and is the first price cut in 2021.
- According to a statement from Iraq’s oil ministry, militants used bombs to attack two oil wells at an oilfield near Kirkuk today. The ministry stated that production at the site has not been affected.
- Yesterday afternoon an industry group released its weekly inventory report. They showed that U.S. crude oil inventories fell 7.7 million barrels last week.
- The Reuters poll of analysts and traders is calling for the EIA to report a 2.346 million barrel draw in U.S. crude oil stocks for the week ending April 30.
- The June crude oil contract is trading $0.76 higher at $66.45. The 20-day and 100-day moving averages are $62.68 and $57.33, respectively. The 14-day RSI is 64.12%.
- As of 8:58 am CST: July Brent is up $0.82 at $69.70, the U.S. dollar index is 0.018 lower at 91.270, while the nearby e-mini S&P 500 futures contract is up 15.75 at 4,174.00.
Diesel
- The June ULSD contract is trading $0.0195 higher at $2.0183. The 20-day and 100-day moving averages are $1.8943 and $1.7348, respectively. The 14-day RSI is 68.59%.
- Yesterday afternoon an industry group released its weekly inventory report and showed that U.S. distillate inventories fell 3.5 million barrels last week.
- The Reuters poll of analysts and traders is estimating that the EIA will report a 1.12 million barrel draw in U.S. distillate stocks for the week ending April 30.
Gasoline
- The May RBOB contract is trading $0.0295 higher at $2.1807. The 20-day and 100-day moving averages are $2.0377 and $1.8272, respectively. The 14-day RSI is 69.55%. An RSI above 70% typically indicates an overbought contract from a technical perspective.
- Yesterday afternoon an industry group released its weekly inventory report and showed that gasoline inventories fell 5.3 million barrels last week.
- The Reuters poll of analysts and traders is anticipating that the EIA will report a 652,000 barrel draw in U.S. gasoline stocks for the week ending April 30.
Propane
- Propane prices are moving higher this morning. At last look, Conway propane was up $0.0225, trading at $0.7950. Mt. Belvieu was up $0.0250, trading at $0.8275.
- According to an OPIS survey of analysts and traders, U.S. propane stocks are likely to have risen 843,000 barrels lasts week.
- IHS Markit is predicting that U.S. propane stocks rose 1.295 million barrels in the week ending April 30. IHS Markit also stated that their inventory forecast only increases the days of forward supply by 1 day, to 19 days total. The days of forward supply would likely remain under the 20-day level for a record high of 15 straight weeks.
Natural Gas
- The June Natural Gas contract is trading $0.021 lower at $2.946. The 20-day and 100-day moving averages are $2.814 and $2.766, respectively. The 14-day RSI is 65.19%.
- Natural gas futures are holding relatively steady this morning, as forecasts for cooler weather and strong export demand are helping maintain elevated prices. The amount of natural gas moving to U.S. export facilities has averaged 11.1 bcfd thus far in May. The all-time high of 11.5 bcfd was set in April.
- Tomorrow the EIA will release its Weekly Natural Gas Storage Report.
