Outlook: The energy market trades in positive territory this morning with Crude outpacing gains in the product markets. The front month WTI contract managed to hit highs overnight just 5 cents shy of $72 a barrel. Support continues to stem from optimistic demand outlooks across the globe. Several leaders of large global trading houses expressed their continued bullishness at an FT Energy conference, citing tightening of supplies and strengthening demand. One trading house expressed that it saw the crude market remaining in a $70 to $80 per barrel range for the remainder of the year. Equities on the other hand are trading lower this morning as investors eye the upcoming Fed meeting. The Federal Reserve is not expected to change its current policy yet but may bring up plans to change its bond-buying policy this summer. In other news, it was also reported that Britain will extend its current Covid-19 restrictions for another four weeks. Previously the restrictions were set to end June 21, however officials remain warry of the Delta variant spreading through Europe.
- China stated today that nuclear levels around the Taishan nuclear project remain normal following reports of a leak at one of the reactors.
- According to the Census Bureau, retail sales fell by 1.3% in May compared to analysts’ estimates of just 0.6%. Producer prices saw their fastest annual increase since the metric was first tracked in 2010, up by 6.6% due to inflation.
- Extreme heat in Texas and California is proving stressful for the two state’s electric grids, leading to the possibility of another weather prompted blackout this year. Texas officials have requested that households conserve power after several plants were shut down for repairs.
- The Minnesota Court of Appeals ruled in favor of the Enbridge Line 3 oil pipeline replacement yesterday. The replacement of this line will allow for the company to increase the capacity to 760,000 bpd.
- The July crude oil contract is trading $1.01 higher at $71.89. The 20-day and 100-day moving averages are $67.69 and $61.93 respectively. The 14-day RSI is 71.47%.
- As of 8:45 am CST: July Brent is up $0.86 at $73.72, the U.S. dollar index is 0.040 higher at 90.562, while the nearby e-mini S&P 500 futures contract is down 4.00 points at 4250.75.
- Strong demand recovery continues to support prices, however upside potential is currently limited as traders wait for additional news regarding the Biden Administration and RFS relief.
- The July ULSD contract is trading $0.0083 higher at $2.1199. The 20-day and 100-day moving averages are $2.0746 and $1.8858, respectively. The 14-day RSI is 60.62%.
- RBOB futures continue to face pressure due to uncertainty revolving around RFS relief, crack spreads also continue to trend weaker.
- According to reports, China’s gasoline demand in May was seen 5% higher than the same period in 2019 as the country continues its economic recovery from Covid-19.
- The July RBOB contract is trading $0.0067 higher at $2.1779. The 20-day and 100-day moving averages are $2.1535 and $1.9623, respectively. The 14-day RSI is 55.89%.
- At last look, Conway propane was down $0.00500, trading at $0.94250. Mt. Belvieu was down $0.00500, trading at $0.95000.
- Natural gas inventories are seen very low in Europe causing several countries to turn to coal burning in order to meet the new electricity demand from economic reopening.
- The July Natural Gas contract is trading $0.022 lower at $3.330. The 20-day and 100-day moving averages are $3.087 and $2.915, respectively. The 14-day RSI is 70.44%.
|As of 8:45 AM CST||WTI July||ULSD July||RBOB July||Nat Gas July|