Outlook: The petroleum complex is seen heading into Memorial weekend on a strong note, trading in the green to start the day. WTI futures managed to close yesterday at its strongest settle since October 2018 and continues its trek higher this morning. The benchmark Brent contract also is taking another run at the strong psychological level of $70. Currently both crude contracts are set to see weekly gains of around 5% to 6%. Support stems from strong economic optimism in the U.S. and EU. Demand outlooks also support energy prices as we head into Memorial weekend where Americans are expected to boost travel significantly. Iranian supply concerns limit gains, but several groups have recently stated that support for markets should continue regardless of a slight increase in supply. Analysts currently expect that demand could rebound to 100 million bpd during the third quarter due to increased summer travel in both the U.S. and Europe. Several areas are also now seeing gasoline demand exceed levels from 2019 according to ANZ analysts. Traders will now turn their attention to next week’s OPEC+ meeting. Sources from the group have stated that the existing pace of gradually easing current supply curbs will likely remain as the group balances demand recovery and increasing Iranian supply.
- Australian & New Zealand Banking Group expects global oil demand to outstrip supply by 500,000 bpd in the second half of the year, regardless of increased Iranian supply.
- Russia’s idle oil refining capacity has been revised up by 12% for the month of June. Expected offline oil capacity for June now sits at 3.161 million tonnes.
- Total, French oil and gas group, laid out its plan to reach carbon neutrality by 2050 at its annual meeting. 91.88% of shareholders were seen backing the move to a green rebrand.
- Crude oil supply from the North Sea that backs the Brent benchmark is expected to rise from 600,000 bpd in June to 755,000 bpd in July.
- A key inflation indicator, the core personal consumption expenditures indicator, was seen rising by 3.1% in April, faster than the expected increase of 2.9%. Personal income also fell by 13.1% in April after soaring higher due to stimulus checks in March.
- The June crude oil contract is trading $0.47 higher at $67.32. The 20-day and 100-day moving averages are $65.19 and $59.96 respectively. The 14-day RSI is 60.86%.
- As of 8:05 am CST: June Brent is up $0.29 at $69.75, the U.S. dollar index is 0.416 higher at 90.387, while the nearby e-mini S&P 500 futures contract is up 11.00 points at 4210.00.
- The first diesel import vessel arrived in Venezuela since November, carrying about 500,000 barrels of the fuel. Diesel has been desperately needed by farmers and truckers after the U.S. hit the country with sanctions causing importers to need special authorization to import the fuel.
- The June ULSD contract is trading $0.0106 higher at $2.0670. The 20-day and 100-day moving averages are $2.0212 and $1.8280, respectively. The 14-day RSI is 62.00%.
- 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. High demand and continued outages from the pipeline hack cause tightness to remain on the East Coast.
- The June RBOB contract is trading $0.0072 higher at $2.1590. The 20-day and 100-day moving averages are $2.1239 and $1.9194, respectively. The 14-day RSI is 60.57%.
- At last look, Conway propane was up $0.01250, trading at $0.85500. Mt. Belvieu was up $0.01250, trading at $0.88500.
- Asian LNG spot prices were seen rising this week as buyers stocked up on anticipation for increased cooling demand this summer. Forecasts for Tokyo, Seoul, Beijing, and Shanghai are all showing warmer than usual temperatures for the next two weeks.
- The May Natural Gas contract is trading $0.072 higher at $3.030. The 20-day and 100-day moving averages are $3.010 and $2.876, respectively. The 14-day RSI is 54.93%.
|As of 8:05 AM CST||WTI June||ULSD June||RBOB June||Nat Gas June|