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Outlook: The petroleum complex has started the week on a positive note with crude prices hitting their highest levels in over two years. The front month WTI contract traded up to $71.75 a barrel overnight, its highest level since October 2018. Support in the markets stems from continued economic recovery and optimistic demand outlooks. Motor vehicle traffic in both North America and a majority of Europe has returned to pre-pandemic levels while airline traffic also continues to increase. As demand is seen surging across the globe, the IEA has stated that OPEC+ should increase production in order to ease tightening supplies. A lack of new developments with Iranian talks also supports the market as traders do not expect the increase in supply to occur anytime soon. According to reports from Bloomberg, the Iranian foreign ministry stated that there is “very little time left” to revive the 2015 nuclear deal. Markets will keep a close eye on these headlines going forward, but current demand fundamentals should supply ample support to prices.

Crude

• Royal Dutch Shell is reportedly considering the sale of its 260,000 acres in the Permian Basin as the company looks to accelerate its carbon emissions cuts. This comes after the Dutch court ruling that called for the company to cut emissions by 45% by 2030.
• Iraq’s oil minister, Ihsan Abdul Jabbar, stated that he expects oil prices to stay between $68 and $75 per barrel in the second half of the year.
• The IEA reported on Friday that it sees global energy demand reaching pre-pandemic levels by the end of 2022, earlier than its prior forecast.
• Last Friday’s Baker Hughes report showed U.S. oil rigs rising by six to 365, the highest level since April 2020.
• The July crude oil contract is trading $0.55 higher at $71.46. The 20-day and 100-day moving averages are $67.46 and $61.74 respectively. The 14-day RSI is 71.14%.
• As of 8:30 am CST: July Brent is up $0.59 at $73.28, the U.S. dollar index is 0.133 lower at 90.422, while the nearby e-mini S&P 500 futures contract is up 1.00 points at 4246.75.

Diesel

• This past weekend, TSA Traveler Checkpoint numbers were seen topping 2 million for the first time since the start of the pandemic. Sunday’s throughput number was reported at 2.097 million.
• The July ULSD contract is trading $0.0045 higher at $2.1252. The 20-day and 100-day moving averages are $2.0729 and $1.8809, respectively. The 14-day RSI is 64.03%.

Gasoline

• RBOB futures have managed to recover some of their losses from Friday’s headlines regarding relief from U.S. biofuel laws. Crude gains however outpace the RBOB market, leading to further pressure on RBOB cracks.
• The July RBOB contract is trading $0.0005 higher at $2.1866. The 20-day and 100-day moving averages are $2.1598 and $1.9765, respectively. The 14-day RSI is 58.01%.

Propane

• At last look, Conway propane was up $0.00500, trading at $0.95500. Mt. Belvieu was up $0.00500, trading at $0.95750.

Natural Gas

• Natural gas futures are seen holding steady at their seven month highs due to hotter-than-usual weather that is increasing cooling demand. The RSI however is now above 70%, signaling that the market may be overbought.
• The July Natural Gas contract is trading $0.009 higher at $3.305. The 20-day and 100-day moving averages are $3.077 and $2.908, respectively. The 14-day RSI is 71.06%.