Morning Highlights
Morning Highlights

6.23.21 The energy complex trades higher this morning in front of the EIA’s Weekly Petroleum Status Report


Katie Murphy

Jun 23, 2021

Outlook: The energy complex trades higher this morning in front of the EIA’s Weekly Petroleum Status Report. Support stems from tighter inventories after the American Petroleum Institute reported that crude stocks had fallen by a massive 7.2 million barrels. The market’s uptrend seems to be gaining back its momentum as global demand continues to be strong while supplies tighten. Talks to revive Tehran’s 2015 nuclear deal are expected to lead to a removal of all U.S. sanctions on Iran’s oil and shipping, however negotiations remain on pause. Additionally, OPEC+ is set to meet on July 1 to consider the further unwinding of supply cuts. Overall, the market’s supply and demand fundamentals remain supportive, but traders will continue to watch developing headlines in regard to both OPEC+ and Iran.

Crude

  • Yesterday the API reported that crude stockpiles fell by 7.2 million barrels in the week ending June 18. Analysts are expecting this morning’s report to show a draw of 3.9 million barrels, this would mark the fifth consecutive week of draws.
  • CEOs of both Royal Dutch Shell and TotalEnergies have stated that they could see oil going as high as $100 a barrel, but also cautioned that volatility could cause the market to go back down again.
  • The U.S. has reportedly blocked three dozen Iranian websites, including state-run media, according to the Justice Department.
  • The July crude oil contract is trading $0.74 higher at $73.59. The 20-day and 100-day moving averages are $69.92 and $62.82 respectively. The 14-day RSI is 72.61%.
  • As of 8:00 am CST: July Brent is up $0.74 at $74.67, the U.S. dollar index is 0.124 lower at 91.632, while the nearby e-mini S&P 500 futures contract is up 5.25 points at 4241.5

Diesel

  • The API reported that distillate stockpiles rose by 990,000 barrels in the week ending June 18. Analysts are expecting this morning’s report to show a build of 1.1 million barrels
  • According to Eurocontrol, flights in the European air zone have increased steadily since early May, with the deficit to 2019 levels now narrowed in to less than 50%.
  • The July ULSD contract is trading $0.0184 higher at $2.1694. The 20-day and 100-day moving averages are $2.1084 and $1.9185, respectively. The 14-day RSI is 66.45%.

Gasoline

  • The API reported that gasoline stockpiles rose by 960,000 barrels in the week ending June 18. Analysts are expecting this morning’s report to show a build of 800,000 barrels.
  • A new study by consultant Earnst & Young sees global electric vehicle supremacy arriving five years earlier than expected, with the new forecast year set at 2033.
  • The July RBOB contract is trading $0.0245 higher at $2.2488. The 20-day and 100-day moving averages are $2.1842 and $1.9964, respectively. The 14-day RSI is 66.12%.

Propane

  • Analysts expect this morning’s EIA report to show a build of 2.2 million bbl for U.S. propane stocks. Robust exports should help support demand numbers this week. Year on year, stocks as of last week were down by 20%.
  • At last look, Conway propane closed at $0.98750 and Mt. Belvieu closed at $0.99250.

Natural Gas

  • Natural gas futures continue to rebound back from their one-week low and are expected to hold these gains as we see above average temperatures in the West to boosting power demand.
  • The July Natural Gas contract is trading $0.082 higher at $3.340. The 20-day and 100-day moving averages are $3.174 and $2.958, respectively. The 14-day RSI is 63.98%.

As of 8:00 AM CST   WTI JulyULSD JulyRBOB JulyNat Gas July
CONTRACT HIGH71.002.31752.21704.720
RESISTANCE75.002.20002.23653.330
PREVIOUS CLOSE72.852.15102.22433.258
GLOBEX-CURRENT73.592.16942.24883.340
SUPPORT66.702.11602.15583.000
CONTRACT LOW6.500.67240.51891.521