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Outlook: The energy complex experienced weaker and mixed trade during the overnight session as boosts in Iranian production and economic optimism weigh against each other. WTI crude is seen trading lower to start the day where as RBOB futures have managed to pull into the green. Current focus for energy traders likely looks towards this morning’s Weekly Petroleum Status Report. Analysts expect that the group will post draws across the board, as seen with yesterday afternoon’s API report. Weakness in crude this morning stems from continued talks between the U.S. and Iran in regard to the nuclear deal. Currently the market expects that we will inevitably see an increase in Iranian production, but attention also turns towards next week’s OPEC+ meeting. The next meeting is scheduled for June 1, Russia stated that OPEC should consider the possibility of increased Iranian supply when making their next production decision. Losses this morning are limited by optimism for economic recovery. The U.S. reported less than 25,000 new cases in Covid-19 yesterday and over half of the population is now vaccinated. Several travel related stocks are trading higher this morning as there are strong expectations of an increase in demand now that restrictions have been largely removed. Equities also find strength from these positive headlines and the U.S. dollar sits near multi-month lows.

Crude

• Yesterday the API reported a disappointing draw of just 439,000 barrels on its weekly inventory report. Analysts are estimating that this morning’s EIA report will show a draw of 1.1 million barrels.
• Saudi Arabia’s oil exports value rose by 75% in March, year over year. The General Authority for Statistics reported that crude exports accounted for 70% of the country’s total exports.
• Russia’s Novak stated today that he sees the global oil deficit currently sitting at around 1 million bpd. He also stated that OPEC+ should take Iran’s possible increase in production into account during its next meeting.  
• The Biden Administration is reportedly working alongside pipeline companies in order to boost cyber protections after the Colonial Pipeline hack.
• The June crude oil contract is trading $0.52 lower at $65.55. The 20-day and 100-day moving averages are $64.87 and $59.59 respectively. The 14-day RSI is 55.23%.
• As of 8:30 am CST: June Brent is down $0.42 at $68.23, the U.S. dollar index is 0.261 higher at 89.900, while the nearby e-mini S&P 500 futures contract is up 6.5 points at 4192.

Diesel

• Yesterday the API reported a massive draw of 5.1 million barrels on its weekly inventory report. Analysts are estimating that this morning’s EIA report will show a draw of 1.9 million barrels.
• The June ULSD contract is trading $0.0078 lower at $2.0276. The 20-day and 100-day moving averages are $2.0086 and $1.8167, respectively. The 14-day RSI is 56.83%.

Gasoline

• Yesterday the API reported a large draw of 2.0 million barrels on its weekly inventory report. Analysts are estimating that this morning’s EIA report will show a draw of 600,000 barrels.
• Ford Motor Company recently announced that it would be increasing its investment into electric vehicles by $30 billion through 2025.
• The June RBOB contract is trading $0.0022 higher at $2.1195. The 20-day and 100-day moving averages are $2.1146 and $1.9066, respectively. The 14-day RSI is 55.83%.
  

Propane

• At last look, Conway propane was down $0.00750, trading at $0.82750. Mt. Belvieu was up $0.02250, trading at $0.85750.
  

Natural Gas

• The May Natural Gas contract is trading $0.024 higher at $2.937. The 20-day and 100-day moving averages are $3.006 and $2.871, respectively. The 14-day RSI is 53.09%.
  

The EIA has lowered its forecast for India's oil demand due to the recent surge in Covid-19 cases.