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Outlook: The energy complex has moved slightly higher overnight, making up for some of the losses seen during yesterday’s sharp move lower. Crude oil futures have managed to build on their gains this morning, now trading about 2% higher on the day. Support stems from strengthening equities as Dow and S&P futures try to recover from their losses earlier in the week. The Federal Reserve attempted to ease inflation concerns this morning, stating that price rises should be temporary and are due to the reopening of the economy. The U.S. dollar was also seen weakening against a basket of major currencies which further supported the energy market. This morning the Commerce Department reported that retail sales were unchanged in April. Equity futures were seen paring some of their gains after this report and are on track to see weekly losses of around 2% for the Dow and S&P futures and over 4% for Nasdaq futures. Covid-19 related headlines within the U.S. also support markets, with the CDC announcing an easing of current guidelines yesterday afternoon. President Biden announced that the CDC will now allow fully vaccinated people to no longer wear masks indoors or outdoors. Several airline stocks were seen benefiting from this announcement as it is a strong sign of continued improvements within the U.S. While Covid-19 issues in India persist and limit gains in the market, prices should still continue their long-term upward trend despite this week’s volatility.

Crude

• U.S. retail sales were unchanged in April vs analysts’ expectation of a 1.0% increase. Sales were seen surging by over 10% the month prior due to a boost from stimulus spending. Despite the disappointing report, sales are expected to surge in coming months as the economy continues to reopen.  
• Conflicts within the Middle East are watched closely by traders as Israel struck Gaza with both artillery fire and air strikes today as it targeted Palestinian militant tunnels. Palestinian militants have now fired rockets at Israeli towns for five days.
• Colonial Pipeline stated that their pipeline had fully restarted yesterday evening. The supply chain is expected to recover and return to normal this weekend.
• The University of Michigan's survey of consumer sentiment fell from 88.3 in April to 82.8 in May. Analysts were expecting the index to be reported around 90.4 and likely fell in May due to an increase in inflation.
• Coronavirus cases were seen topping 24 million in India over the last 24 hours.
• The June crude oil contract is trading $1.03 higher at $64.85. The 20-day and 100-day moving averages are $63.93 and $58.51 respectively. The 14-day RSI is 55.12%.
• As of 8:45 am CST: June Brent is up $0.98 at $68.03, the U.S. dollar index is 0.414 lower at 90.338, while the nearby e-mini S&P 500 futures contract is up 37.25 points at 4144.25.

Diesel

• The June ULSD contract is trading $0.0245 higher at $2.0254. The 20-day and 100-day moving averages are $1.9544 and $1.7728, respectively. The 14-day RSI is 61.67%.
• The TSA Total Traveler Throughput rose to a new pandemic high of 1.744 million yesterday. Airline stocks were also seen trading higher this morning as the market finds even more optimism after yesterday's CDC announcement.

Gasoline

• Total SE reported that it plans to raise gasoline production at its 225,500 bpd facility in Port Arthur, Texas due to draw downs caused by the Colonial Pipeline shutdown.
• GasBuddy reported that about 70% of stations in North Carolina were seen without fuel on Thursday, and about 50% were without fuel in South Carolina, Virginia, and Georgia.
• The June RBOB contract is trading $0.0145 higher at $2.1098. The 20-day and 100-day moving averages are $2.0739 and $1.8579, respectively. The 14-day RSI is 57.23%.

Propane

• Supportive fundamentals in the propane market helped keep prices afloat yesterday during crudes crash lower. Inventories remain tight compared to a year over year basis.
• At last look, Conway propane was down $0.0125, trading at $0.78250. Mt. Belvieu was down $0.0125, trading at $0.80250.

Natural Gas

• Currently the market’s gains are fueled by export activity and slow production as weather fundamentals are less than supportive.
• The May Natural Gas contract is trading $0.001 higher at $2.974. The 20-day and 100-day moving averages are $2.965 and $2.844, respectively. The 14-day RSI is 65.13%.