Outlook: Energy markets have been mixed and choppy this morning as a weak jobs report and rising Covid-19 cases in India weigh on the complex. A much weaker dollar has brought a level of support to the energy complex however, as the dollar has dropped to its lowest level since late February. This morning the U.S. Department of Labor reported that nonfarm payrolls in April rose far below industry expectations. The weak jobs data would suggest that an imminent rate hike from the Federal Reserve is off the table. India reported over 414,000 new confirmed cases of Covid-19, and over 3,900 deaths due to the virus in the last 24 hours. India continues to see a record high number of new cases each day. Health officials believe that the case count will hit 500,000 per day within a couple of weeks. Case counts in neighboring Nepal are also on the rise. Two weeks ago the country reported just 1,100 cases. As of yesterday, Nepal was averaging 6,700 new cases per day. India is the world’s third largest consumer of crude oil behind the U.S. and China. The mounting number of Covid-19 cases is widely anticipated to crimp global crude oil demand for the month of May. Equities have seemingly shaken off the weak jobs data, as all three major averages are trading well above even. Both the S&P 500 and the DJIA have hit intra-day all-time highs this morning.
- Pfizer and BioNTech have started the regulatory process in order to obtain full approval for their Covid-19 vaccine. They are the first company to file for a full license in order to market their vaccine directly to consumers. If approved, it would allow the vaccine to stay on the market once the pandemic is over.
- The U.S. added far fewer jobs in April than anticipated, according to the most recent data from the U.S. Bureau of Labor and Statistics. They reported that U.S. nonfarm payrolls rose 266,000 in April, and the unemployment rate actually rose to 6.1%. Economists polled by Dow Jones anticipated 1 million new jobs and the unemployment rate to have fallen to 5.8%.
- Today at noon CST Baker Hughes will release its weekly Rig Count Report. Last week U.S. producers cut 1 oil rig, bringing the total down to 342.
- This afternoon the CFTC will release its weekly Commitments of Traders Report. We’ll go into that data on Monday morning.
- The June crude oil contract is trading $0.12 lower at $64.59. The 20-day and 100-day moving averages are $63.16 and $57.68, respectively. The 14-day RSI is 56.38%.
- As of 10:12 am CST: July Brent is down $0.03 at $68.06, the U.S. dollar index is 0.576 lower at 90.378, while the nearby e-mini S&P 500 futures contract is up 31.25 at 4,225.50.
Diesel
- The June ULSD contract is trading $0.0031 higher at $1.9926. The 20-day and 100-day moving averages are $1.9118 and $1.7455, respectively. The 14-day RSI is 65.37%.
- China’s crude oil imports have fallen 0.2% in April when compared to the same time period in 2020, according to data from the General Administration of Customs. China’s crude oil imports averaged 9.82 million bpd last month, which was the lowest since December and down from 11.69 million bpd in March.
- The current national average retail price for diesel fuel is $3.104 per gallon. Prices have risen about 2.5 cents since last week. Prices last year at this time averaged $2.426 per gallon, according to data from AAA.
Gasoline
- The June RBOB contract is trading $0.0025 higher at $2.1162. The 20-day and 100-day moving averages are $2.0515 and $1.8399, respectively. The 14-day RSI is 60.26%.
- According to AAA, the current national average price for gasoline $2.954 per gallon. Prices have risen about 5 cents in the last week. The average price last year at this time was more than $1 per gallon cheaper than today, standing at $1.813 per gallon.
Propane
- Propane prices are slightly mixed this morning. At last look, Conway propane was flat, trading at $0.7750. Mt. Belvieu was down $0.0100, trading at $0.7900.
- The NOAA’s 6-10 day weather outlook is calling for much cooler temperatures for the eastern half of the country. The 8-14 day outlook is calling for temperatures to return to more normal levels. Last week U.S. demand for propane rose, while exports shrank, leading to a relatively small build in U.S. propane stocks.
Natural Gas
- The June Natural Gas contract is trading $0.008 higher at $2.936. The 20-day and 100-day moving averages are $2.846 and $2.772, respectively. The 14-day RSI is 63.74%.
- Yesterday morning the EIA released its Weekly Natural Gas Storage Report and showed that working gas in storage rose 60 Bcf in the week ending April 30. Natural gas stocks are 345 Bcf lower than last year at this time, and 61 Bcf below the five-year average.
