Outlook: The petroleum complex traded lower overnight as the markets seem to be stuck in their sideways movement. The front month WTI contract was seen falling below $66 a barrel again but has traded within a tight $10 range since March. Yesterday’s inventory data from the EIA managed to give some short lived support, but weakness has continued as focus remains on Iranian supplies. Analysts however have recently stated that should Iran return to the market, the increase in supply would likely be gradual. JP Morgan sees an added 500,000 bpd by the end of this year and an additional 500,000 bpd by August 2022. Attention also turns to next week’s OPEC+ meeting that is scheduled for June 1. It is expected that recent concerns regarding Iranian supply with be an important topic in the group deciding its next steps. Equities this morning are seen climbing higher, finding support from this morning’s optimistic jobless claims report. The Labor Department reported a better than expected number of just 406,000 initial claims for the week ending May 22. Overall, economic recovery continues at a strong pace across the U.S. and EU, keeping markets well supported regardless of Iranian supply concerns. A sideways trend will likely remain for the short term as traders look towards next week’s OPEC+ meeting and wait for an official decision in regard to Iran sanctions.
- China has reportedly given five state-owned companies until Thursday to report on their past use of oil imports. This is part of a broader effort to control imports as domestic supplies are seen swelling in China.
- The Petroleum Association of Japan stated that Japanese refiners would need at least three months to resume imports of Iranian oil if nuclear talks led to the lifting of sanctions.
- The Biden Administration has defended and backed the ConocoPhillips oil drilling project planned for Alaska that was first approved under the Trump Administration.
- April durable goods orders were seen dropping by 1.3% while economists had expected a 0.9% increase. Additionally, the second estimate for first quarter GDP help steady at an annual growth rate of 6.4% compared to 4.3% in quarter four of 2020.
- The June crude oil contract is trading $0.52 lower at $65.69. The 20-day and 100-day moving averages are $64.94 and $59.77 respectively. The 14-day RSI is 55.54%.
- As of 8:00 am CST: June Brent is down $0.51 at $68.36, the U.S. dollar index is 0.020 higher at 90.063, while the nearby e-mini S&P 500 futures contract is up 4.75 points at 4197.75.
- Russia's exports of ULSD from the Baltic Sea port of Primorsk are seen rising by 9.3% in May compared to the originally set estimate of 1.436 million tonnes. The updated plan expects exports of 1.570 million tonnes according to Refinitiv data.
- The June ULSD contract is trading $0.0156 lower at $2.0296. The 20-day and 100-day moving averages are $2.0127 and $1.8224, respectively. The 14-day RSI is 56.48%.
- Data from AAA shows that gas prices in front of Memorial weekend are at their highest level since 2014. The current average price for the U.S. sits around $3.04 a gallon.
- Over 34 million Americans are expected to drive for trips over Memorial Day weekend, up by 53% compared to last year but still down 10% from 2019.
- The June RBOB contract is trading $0.0151 lower at $2.1350. The 20-day and 100-day moving averages are $2.1180 and $1.9132, respectively. The 14-day RSI is 56.70%.
- At last look, Conway propane was up $0.00250, trading at $0.84250. Mt. Belvieu was unchanged, trading at $0.87250.
- Researcher Wood Mackenzie stated that it sees LNG demand growth in Asia slowing in 2022 as capacity for rival fuels, nuclear and coal, are expected to expand in Japan and South Korea.
- The May Natural Gas contract is trading $0.031 lower at $2.996. The 20-day and 100-day moving averages are $3.010 and $2.874, respectively. The 14-day RSI is 53.10%.
|As of 8:00 AM CST||WTI June||ULSD June||RBOB June||Nat Gas June|