Outlook: The energy markets are trading higher this morning in front of the updated Weekly Petroleum Status Report. Support stems from a rosier demand outlook after both the IEA and OPEC have reported optimistic outlooks for this year’s demand recovery. The International Energy Agency, IEA, released its monthly report this morning stating that oil demand recovery in 2021 is expected to continue outstripping supply. The agency recognized that even with the current issues persisting in India and increased Iranian exports, stronger demand beyond the second quarter should easily exceed supply. While both OPEC and the IEA referred to the issues occurring in India with Covid-19, both groups seemed confident that demand growth will continue across the globe, especially in the U.S. and China. Yesterday, a trusted industry group released their weekly inventory stats. The data showed a smaller than expected drop in U.S. crude inventories and traders will now look towards this morning’s government data to see if these stats are confirmed. Additionally, next week’s inventory reports are anticipated to show some effect from this week’s Colonial Pipeline shutdown. Issues continue to persist in eastern states as many gasoline stations began running out of fuel yesterday due to stockpiling. Colonial Pipeline states that the pipeline should be mostly restarted by the end of this week. Equities this morning are taking a bit of a hit due to this morning’s Consumer Price Index Report. The report showed that consumer prices rose by 4.2% in April compared to a year ago, above expectations of a 3.6% increase. This is the fastest increase in inflation since 2008.
- A trusted industry group reported that crude stocks fell by 2.5 million barrels last week, analysts are looking for a draw of 2.8 million barrels on this morning’s EIA report.
- The U.S. Department of Transportation is considering a temporary waiver of the Jones Act in order to ease fuel shortages caused by the pipeline shutdown. The Jones Act requires that goods moved between U.S. ports are shipped by U.S. built ships and staffed by U.S. crews.
- Russia’s compliance with OPEC+ cuts in April were below 100%. Russian Deputy Prime Minister Alexander Novak stated that Moscow will strive to stick to the accord going forward.
- The June crude oil contract is trading $0.25 higher at $65.17. The 20-day and 100-day moving averages are $63.84 and $58.21 respectively. The 14-day RSI is 62.88%.
- As of 8:20 am CST: June Brent is up $0.69 at $69.24, the U.S. dollar index is 0.107 higher at 90.248, while the nearby e-mini S&P 500 futures contract is down 30.25 points at 4166.
- A trusted industry group reported that distillate stocks fell by 872,000 barrels last week, analysts are looking for a draw of 1.1 million barrels on this morning’s EIA report.
- Basis levels have continued their lower trend in the Midwest as planting demand is expected to peak soon and then ease off. Higher refinery rates also support this downwards trend.
- The June ULSD contract is trading $0.0068 higher at $2.0485. The 20-day and 100-day moving averages are $1.9424 and $1.7625, respectively. The 14-day RSI is 71.68%.
- A trusted industry group reported that gasoline stocks rose by a whopping 5.6 million barrels last week, analysts are looking for a draw of 600,000 barrels on this morning’s EIA report.
- The national average for gasoline prices according to AAA now sits around $3.008 a gallon. This is the first time average retail gas prices have risen above $3 since 2014.
- BMW is planning to unveil a hydrogen fuel cell SUV in 2022 as the company continues to look for zero-emission alternatives to battery-electric cars.
- The June RBOB contract is trading $0.0017 higher at $2.1416. The 20-day and 100-day moving averages are $2.0738 and $1.8567, respectively. The 14-day RSI is 64.43%.
- Propane prices are trading quieter today, up just slightly this morning. At last look, Conway propane was up $0.0050, trading at $0.79500. Mt. Belvieu was unchanged, trading at $0.80500.
- Reuters analysts are forecasting a 68 to 82 BCF build on this week’s natural gas storage report.
- Upside in this market seems to be currently limited by mild temperature forecasts for the next two weeks. Export demand however remains strong and should lend some support to prices.
- The May Natural Gas contract is trading $0.003 lower at $2.952. The 20-day and 100-day moving averages are $2.888 and $2.778, respectively. The 14-day RSI is 63.08%.
|As of 8:20 AM CST||WTI June||ULSD June||RBOB June||Nat Gas June|