Outlook: Energy markets have taken a step back this morning after strong price run-ups brought the 14 day RSI close to overbought territory. Yesterday we saw U.S. crude inventories drop for the fifth consecutive week as supply tightness continues. Additionally, Chinese crude inventories were also seen recently declining, with stocks down by more than 1 billion barrels compared to the end of March. The upwards trend is expected to remain intact despite current profit taking. OPEC+ is scheduled to meet next week to discuss the current global supply situation and consider the further unwinding of production cuts. India’s oil minister, Dharmendra Pradhan, spoke with the OPEC Secretary-General and stressed the importance of keeping supplies regular and affordable in order to drive economic recovery. Much of the market expects the group to revive some of the current halted production, but focus will remain on the official decision scheduled to come out next week.
- Wall Street Journal reports that it sees OPEC+ considering a production increase of 500,000 barrels
- Initial jobless claims were reported at 411,000 for the week ended June 19, above the 380,000 estimate but below the previous week seen at 418,000.
- The Ifo business-climate index for Germany came in at 101.8 points in June vs 99.2 points in May. As the German economy continues to experience a strong recovery, retail conditions are seeing their fasted upward lead since the reunification more than thirty years ago.
- Russia’s domestic oil prices from the Volga river region have risen to an all-time record high, up by about 11% from the month prior.
- The July crude oil contract is trading $0.37 lower at $72.71. The 20-day and 100-day moving averages are $69.92 and $62.82 respectively. The 14-day RSI is 72.61%.
- As of 9:10 am CST: July Brent is down $0.16 at $75.03, the U.S. dollar index is 0.065 lower at 91.737, while the nearby e-mini S&P 500 futures contract is up 23.5 points at 4255.
- While yesterday’s EIA report was less than supportive in terms of inventories and distillate demand, Jet fuel demand increased to 1.584 million bpd as airline traffic continues to pick up.
- The July ULSD contract is trading $0.0116 lower at $2.1478. The 20-day and 100-day moving averages are $2.1129 and $1.9234, respectively. The 14-day RSI is 61.31%.
- This week's EIA report gave us a bit of a surprise with the large draw seen in Gasoline inventories. After yesterday’s strong rally, prices are seen giving back some of the gains this morning due to profit taking.
- The July RBOB contract is trading $0.0163 lower at $2.2506. The 20-day and 100-day moving averages are $2.1908 and $2.0025, respectively. The 14-day RSI is 64.71%.
- Yesterday we saw propane prices jump above $1/gallon, supported by continued tight inventories and robust exports. Mont Belvieu was seen trading about $1 for the first time in the month of June since 2014.
- Year on year, Conway C3 propane is trading up by about 106%.
- At last look, Conway propane was unchanged, trading at $1.01500. Mt. Belvieu was unchanged, trading at $1.02500.
- The July Natural Gas contract is trading $0.001 lower at $3.332. The 20-day and 100-day moving averages are $3.191 and $2.963, respectively. The 14-day RSI is 64.01%.
|As of 9:10 AM CST||WTI July||ULSD July||RBOB July||Nat Gas July|