Outlook: The energy complex is experiencing lower trade to start the week as crude and products sit mostly in the red. Prices are seen easing after last week’s strong rallies that brought oil up to two-year highs. The front month WTI contract managed to hit $70 a barrel during overnight trade, prior to falling lower. Weakness this morning likely stems from increased fund selling after hitting the $70 mark. Attention also remains on Iranian talks and the prospect of increased supply to the world market. Currently, however, it seems unlikely that any deal would be made prior to the Iranian presidential election that takes place June 18th. Robust demand across the world should continue to support markets. Congestion in European cities is seen at its highest level since 2019, and U.S. TSA Checkpoint numbers continue to climb higher. The strong demand recovery seen across the globe has aided in pushing oil prices up by more than 40% this year. Hitting the $70 mark likely caused some investors to exit their bull positions early, causing markets to stall slightly. Overall, however, markets should remain mostly steady as global recovery is expected to continue for some time.
- OPEC’s secretary general, Mohammad Barkindo, stated today that OPEC and its allies expect oil stocks to fall even further in coming months. Inventories fell by 6.9 million barrels in April, 160 million barrels lower than the same period last year.
- OPEC+ saw compliance of 114% for the month of April.
- Research company IIR Energy expects U.S. oil refiners to have 286,000 bpd of capacity offline for the week ending June 11; up by 295,000 bpd compared to the previous week.
- Crude oil futures saw a large change in spec positions last week, with specs buying 12,450 contracts. The new net long sits at 537,868 contracts.
- The July crude oil contract is trading $0.17 lower at $69.45. The 20-day and 100-day moving averages are $66.11 and $60.83 respectively. The 14-day RSI is 66.48%.
- As of 9:15 am CST: July Brent is down $0.32 at $71.57, the U.S. dollar index is 0.117 lower at 90.019, while the nearby e-mini S&P 500 futures contract is down 8.50 points at 4219.75.
- Last Friday’s CFTC energy report showed that heating oil specs sold 2,144 contracts, leaving the new net long position at 22,626 contracts.
- Soy oil futures continue their soar higher to new record highs due to strong global biofuel demand.
- The July ULSD contract is trading $0.0016 higher at $2.1215. The 20-day and 100-day moving averages are $2.0480 and $1.8545, respectively. The 14-day RSI is 66.72%.
- Last Friday’s CFTC energy report showed that RBOB specs bought 2,506 contracts, leaving the new net long position at 56,101 contracts.
- The July RBOB contract is trading $0.0065 lower at $2.2050. The 20-day and 100-day moving averages are $2.1415 and $1.9484, respectively. The 14-day RSI is 63.92%.
- Last week’s larger than expected build reported by the EIA has helped the market soften slightly. Demand for contracts however limits most losses in the market.
- At last look, Conway propane was down $0.00250, trading at $0.8950. Mt. Belvieu was down $0.00250, trading at $0.91750.
- Last Friday’s CFTC energy report showed that natural gas specs sold 10,791 contracts, leaving the new net short position at 86,420 contracts.
- The July Natural Gas contract is trading $0.048 lower at $3.049. The 20-day and 100-day moving averages are $3.028 and $2.888, respectively. The 14-day RSI is 55.55%.
|As of 9:15 AM CST||WTI July||ULSD July||RBOB July||Nat Gas July|